Japan IPOs surge to most since 2007 as each climbs on first day

IPO Seminars

“We continue to hold IPO seminars in Tokyo, Osaka and Nagoya,” Kuramoto said. The number of companies applying to attend has risen about 10% to 20% from last year. “The reaction to the seminars is good.”

A total of 770 companies went public globally this year through October, according to data provided by the World Federation of Exchanges. In the U.S., 187 listed on the New York Stock Exchange or Nasdaq Stock Market, while there were 56 IPOs in Hong Kong and 84 in London, the data show.

Improving investor sentiment spurred Oisix Inc., which sells food online, to list after preparing since the fall of 2011, according to Chief Financial Officer Tetsuya Hasegawa. The company more than tripled on its trading debut in March, and it forecasts net income will climb 48% in the year ending March 2014.

“When we talked to potential investors before listing, the reaction was really good and we felt a tailwind from the market environment,” Hasegawa said. “Sentiment pretty much determines the supply of funds to startup companies and the current conditions gave us the final push we needed.”

Lottery Win

IPO shares are becoming so attractive that getting the chance to buy them is like winning the lottery, according to Yukio Yamaguchi, who manages a small building firm. He’s subscribed to every public offering since June but hasn’t been successful yet, he said.

“IPO companies are really attractive because you’re practically guaranteed a profit once you manage to buy the shares at the offering price,” said Yamaguchi, who has traded stocks for 15 years.

While individuals are the primary participants in the IPO market, institutional investors are also showing appetite. Fidelity Investments Japan Ltd. holds 8.8% of N Field, making it the second-largest shareholder after the founder, according to data compiled by Bloomberg. The health-care service provider more than doubled to 3,800 yen on its debut in August and closed at 10,360 yen yesterday.

Nippon Life

Nippon Life Insurance Co., Japan’s biggest life insurer, owns 14.3% of IT services provider Broadleaf Co., data compiled by Bloomberg show. JP Morgan Asset Management Japan Ltd. holds 5.8% of PeptiDream Inc., a biopharmaceutical company, the data show. Broadleaf jumped 74% this year, while PeptiDream gained 406%.

Annual listings in Japan peaked at 203 in 2000, nearly doubling from 107 the year before, according to data compiled by Bloomberg.

“The IPO market is recovering after crashing and the number of companies listing shares is still quite low given the size of the economy,” said Takashi Nishibori, senior adviser at Finantec Co., an IPO advisory firm, and a director at several startup companies.

Data show the number of companies going public in Japan in a given year says little about future market performance. Since 2000, the number of IPOs in Japan exceeded 60 in eight of the years; in the following 12 months, the Topix fell four times and rose four times.

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