(Bloomberg) — Two of Japan’s largest initial public offerings this year saw shares jump in their Tokyo debuts on Wednesday, after both companies priced the securities at the top of the marketed range.
(Bloomberg) — Two of Japan’s largest initial public offerings this year saw shares jump in their Tokyo debuts on Wednesday, after both companies priced the securities at the top of the marketed range.
Daiei Kankyo Co. Ltd., which offers waste recycle and treatment services, rallied 33% to 1,796 yen. The IPO raised about 43.3 billion yen ($315 million). Once bankrupt Japanese discount carrier Skymark Airlines Inc. finished at 1,277 yen, 9.2% above its listing price. The company returned to the exchange after raising 32.5 billion yen.
Firms in Japan are coming back to the market in full form after a slew of deals were shelved early this year amid rising geopolitical woes and a surge in equity volatility. Sixteen companies have listed on local exchanges since the start of the fourth quarter, leveraging a typically strong December to lock in funding before the fiscal year wraps up in March.
Daiei Kankyo’s IPO “is one of the rare Japanese IPOs which goes directly to TSE prime market. That impacts to whom it gets distributed, the tiny ones generally go to retail,” said Travis Lundy, Pan-Asia analyst at Quiddity Advisors, adding that most Japanese IPOs go to the so-called standard or growth markets.
He highlighted that the Prime segment allows the stock to be added to the Topix benchmark, potentially luring further demand by the end of January.
Daiei Kankyo plans to use the proceeds to expand its waste treatment facilities. The fresh funds would also come in handy for Skymark at a time when borders are reopening. The airline, which went bankrupt in 2015, returns to Tokyo’s bourse after eight years.
In the past five years, new listings in Japan that raised at least $100 million have ended their first session at least 16% higher, according to data compiled by Bloomberg as of Dec. 13.
Chip design firm Socionext Inc. jumped 15% in its Tokyo debut in October after completing Japan’s largest IPO for this year.
“For Japan IPOs, the market seems to be building in some momentum off Socionext’s strong listing,” said Clarence Chu, an analyst at Aequitas Research who publishes on Smartkarma.
–With assistance from Yasutaka Tamura and Toshiro Hasegawa.
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