Japan firms turning to Asia to raise funds, buy companies

November 22nd, 2010By Category: Work Tips

Have an interest in Japan’s startup market? Then you might need to cast your eyes towards Asia as an increasing number of Japanese companies are capitalizing on globalization and a strong yen to raise funds or acquire businesses amongst Japan’s neighbors.

Some Japanese startups are now going public in South Korea and Taiwan because simpler screening procedures at bourses for emerging companies in those countries help them get their stocks listed faster.

They are seeking funds from outside Japan also because domestic investors are showing reluctance to bet their money on fledgling businesses whereas time is of the essence for young firms in need of raising capital.

Food Discovery Inc would be one example.  A provider of training courses for people aspiring to become food experts, it is due to apply within this year to list its shares on Kosdaq, a South Korean bourse for startups. The company aims to boost its name recognition by going public besides acquiring the funding it needs.

Animation producer DLE is another, this time planning to go public in Taiwan next June. It aims to find local business partners in hopes of selling its creations in China.

Online brokerage house Click Securities Inc initially aimed to go public in Japan and then toyed with the idea of going on Kosdaq because proceedings would have been quicker at the South Korean exchange.

Other Japanese companies including a restaurant chain operator and a technology firm, are also considering listing their stocks in Asian markets outside Japan.

All in all, more than 10 venture companies are expected to go public in other Asian nations by the end of next year.

Last month, Jasdaq reinvented itself as one of the largest exchanges in Asia for emerging enterprises. But Asian stock exchanges for up-and-coming firms such as Kosdaq and Singapore’s Catalist may pose tough competition. They have been targeting Japanese firms, providing them with brochures written in Japanese and holding briefings in Japan about how to go public on their markets.

Meanwhile, the stagnant stock market in Japan and the yen’s appreciation, which boosts the currency’s purchasing power abroad, have led Japanese firms to make investments in other Asian countries.

In August, industrial equipment maker Kito Corp said it will buy an Indian crane maker as part of its effort to serve a growing number of Japanese manufacturers setting up shop in India.

Asahi Glass Co plans to turn a South Korean firm into a wholly owned subsidiary in the process of restructuring its cathode-ray tube display business.

Investment money is flowing both ways with other Asian companies on the lookout for acquisition targets in Japan.

Author of this article


GaijinPot is an online community for foreigners living in Japan, providing information on everything you need to know about enjoying life here, from finding a job and accommodation to having fun.

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  • If they start investing in other countries because of simpler procedures along with a booming market, then this is something that can greatly affect the country’s economy. The business sector should be able to come up with a solution on this problem before its too late.