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IPOs losing popularity in Japan: survey.

TOKYO, Jan. 8 Kyodo

Initial public offerings lost popularity in Japan last year amid a general stock market slump and the failure of companies making IPOs to achieve their earnings targets, an online provider of IPO data said Tuesday.

Of the 121 companies that made IPOs in Japan last year, 29 firms, or 24 percent, saw their initial market quotes slip below their respective IPO prices, Tokyo IPO said.

The percentage exceeded 20 percent for the first time in six years.

While the total number of IPO firms declined by 67 from the previous year, the number of those posting initial market quotes below their respective IPO prices increased by nine.

Last year's number of IPO firms that saw higher initial market quotes than their respective IPO prices decreased by 70 from the previous year to 89, slipping below 100 for first time in five years. Three firms saw their initial market quotes matching IPO prices.

''Investors increasingly doubted the future potential and growth of IPO firms,'' said Takashi Nishibori, chief editor at Tokyo IPO.

For house builder Hinokiya Juutaku Co. that made an IPO on the second section of the Nagoya Stock Exchange last November, the initial market quote came to 47,100 yen, 32.7 percent lower than the IPO price of 70,000 yen.

Ad agency Chuko Co., which made its debut on the Nagoya Stock Exchange's Centrex market for start-up firms last February, saw its initial market quote at 220 yen, 26.7 percent lower than the IPO price of 300 yen.

Stock market sources said they expect the number of IPOs in Japan this year to fall to about 100 from last year's 121 due to declines in markets for emerging firms, although major companies like Mitsui Life Insurance Co. and Seven Bank are planning IPOs.
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Publication:Japan Weekly Monitor
Date:Jan 14, 2008
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