JIN-168 -- Plenty of (Small) IPOs Planned for 2002

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J@pan Inc Magazine Presents:
T H E J @ P A N I N C N E W S L E T T E R
Commentary on the Week's Business and Technology News
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Issue No. 168
Wednesday, February 13, 2002
Tokyo

CONTENTS

++ Viewpoint: Plenty of (Small) IPOs Planned for 2002

++ Noteworthy News
- Ministry Tells NTT, Yahoo! BB to Improve Customer Service
- Government Quietly Orchestrating Snow Brand Bail-Out
- Tokyo Police Find Lethal Air Guns Sold over Net
++ Events

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++ VIEWPOINT: Plenty of (Small) IPOs Planned for 2002

Japanese financial markets handled 169 initial public offerings in
2001, while US markets saw just 98 IPOs. What's going on here? We
called Tom Sato of Tokyo IPO to find out.

Sato's Tokyo IPO Web site (http://www.tokyoipo.com) focuses solely
on companies planning, launching or just finishing their IPOs. When
we called him, an IT company selling dealing systems and software to
the financial sector -- Simplex Technology -- had just launched on
Jasdaq. Its IPO price was 192,000 yen, but its opening price was
999,000 yen. Not bad, huh? "It's outrageous," Sato said. But
Simplex's launch is also typical of Japan's IPOs; despite the huge
rise in share price, Simplex raised a modest 672 million yen on its
launch. Japanese IPOs "have small financing, few shares, and demand
quickly outstrips supply," Sato said. "In the US, where the IPO
market is mature, if the deal is under $50 million, underwriters
aren't interested. But in Japan, they are quite interested."

The fact that Japan's IPOs are smaller than those in the US comes as
no surprise. Financial markets in Japan such as Mothers and Nasdaq
are just starting to mature after rocky starts. But why so many IPOs
in this beat up economy? "Companies are desperate to get on the
market because they can't get loans from banks," Sato said.

He said 2002 will be a strong year for IPOs in Japan, with
150 to 160 likely to take place. "We won't see big IPOs," he said,
"but there will be a whole bunch of small IPOs out there. That's
because the market is so fragile. It's a bargain market at the
moment."

And where are the best bargains? Sato listed a few hot sectors:
niche IT companies, real estate firms, entertainment and services.

-- Bruce Rutledge

"Putting Your Money Where Your Mouth Is" by Tom Sato from the
October 2001 issue: http://www.japaninc.com/article.php?articleID=26

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++ NOTEWORTHY NEWS
(Long URLs may break across two lines.)

** Ministry Tells NTT, Yahoo! BB to Improve Customer Service

Extract: The Japanese press reported this week that the
Telecommunications Ministry issued an administrative order for NTT
East and West and BB Technologies, part of the Yahoo! BB
family, to improve customer service when it comes to connecting and
disconnecting digital subscriber line (DSL) services. The ministry
said the average time it took a customer to cancel a contract with
NTT and establish an ADSL hookup with BB Technologies was 27 days.

Commentary: Here's one example of the black hole consumers can fall
into as NTT and Yahoo! battle over ADSL turf. A friend wanted to
sign up for Yahoo! BB's ADSL service, but she had to switch the name
on her NTT phone line before she could transfer it. NTT insisted
that she had to have a copy of her family register and other
documents to change the name. No substitute would do, and faxes or
emails would not be accepted. Needless to say, this working mother
didn't really have the time to run around gathering the documents,
so days ran into weeks, and she still hadn't had time to change the
name over. Meanwhile, she had applied for Yahoo! BB's ADSL service,
and the company periodically sent her emails reminding her that she
needed to present documents at the NTT office before she could get
the ADSL services. She sent an email back saying she was working on
it, but the emails from Yahoo! were automatic, and they just kept
coming. So there she was, stuck in the middle, too many humans
blocking her way at NTT, too few humans at Yahoo BB!, and still no
ADSL service in sight.

"Broadband Wars" from December 2001 issue:
http://www.japaninc.com/article.php?articleID=528

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** Government Quietly Orchestrating Snow Brand Bail-Out

Extract: The Financial Times reported today that the Japanese
government is quietly planning a bail-out of Snow Brand, the food
and dairy products group that has been caught switching the labels
on beef. The FT says three agricultural co-ops are likely to step in
to save the beleaguered company.

Commentary: This stinks more than a carton of rotting [[wagyu]].
Just a week ago, an Agriculture Ministry official worried aloud
about the prospect of a foreign company buying out and
rehabilitating Snow Brand. God forbid! I can't think of a better
example of a company that ought to be allowed to fall flat on its
face. But a co-op official told the FT that Snow Brand is "vital for
Japan's dairy industry." I think I'm becoming lactose intolerant.

-- BR

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** Tokyo Police Find Lethal Air Guns Sold over Net

Extract: The Tokyo Metropolitan Police have found M29 air guns being
sold over the Internet, the Daily Yomiuri reported. Production of
the M29s was banned 16 years ago because they were thought to be
lethal. The guns, which fire plastic bullets, are modeled on the .44
Magnum Clint Eastwood carries in the Dirty Harry movies.
Investigators found that the guns could also fire live ammunition.

Commentary: This news comes a week after The New York Times and many
Japanese newspapers reported that Japan's National Police Agency is
pushing for adoption of a licensing system for Internet auctions
here and abroad. People hawking illegal goods over the Net in Japan
may want to think twice; they may just become part of the NPA's
Exhibit A.

From the Daily Yomiuri newspaper:
http://www.yomiuri.co.jp/newse/20020213wo23.htm

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STAFF
Written by Bruce Rutledge (bruce@japaninc.com) and Sumie Kawakami
(sumie@japaninc.com)

Edited by J Mark Lytle (mark@japaninc.com)

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