1st section to Prime section, the same thing
TSE consists of four segments: 1st section, 2nd section, Mothers, and JASDAQ. In 2022 April, they will be restructured into three new segments: Prime, Standard, and Growth.
The main purpose of the restructuring is to appeal to global investors to invite global capital into Tokyo market. It is harder to become the Prime listed company than to become 1st section company.
Many listed companies even in 1st section do not have IR document in English. To become Prime listed company, they have to prepare these documents as well as “constructive dialogue with global investors”. This is quite important since only through continuous dialogue, cost of shareholder's equity decreased.
TSE’s plan was to screen companies that are attractive from global investors. But what actually happened is almost all companies listed the 1st section will keep "the highest status", which is Prime. TSE allowed companies that are not qualified to listed in Prime section a transitional measures. These unqualified companies can be able to “improve” themselves. As a result, about 90% of the 1st section companies will “remain” Prime section. This is quite Japanese way of doing things as always. It is good to companies in TSE but not good to investors outside the country.
