DEFINITION of Tokyo Stock Exchange (TSE)
The Tokyo Stock Exchange (TSE) is the largest stock exchange in Japan, headquartered in its capital city of Tokyo. The Tokyo Stock Exchange was established on May 15, 1878. Today exchange has close to 3,500 listed companies, with a combined market capitalization in 2018 of greater than $4 trillion. The exchange is home to the largest and best-known Japanese giants with a global presence, including Toyota, Honda and Mitsubishi.
In addition the TSE offers specific trading information, real-time and historical index quotes, market statistics, and information about and from specialists.
Notably, the acronym TSE for the Tokyo Stock Exchange should not be confused with Canada's Toronto Stock Exchange, which is known by the acronym TSX.
BREAKING DOWN Tokyo Stock Exchange (TSE)
At the peak of the Japanese asset price bubble in December 1989, the Nikkei 225 index reached a record high of 38916. Following this the TSE's combined market capitalization shrank dramatically over the next two decades, as the Japanese economy struggled with a recessionary environment and the Nikkei plunged in value.
Current board members of the Tokyo Stock Exchange, according to Bloomberg, are: Senior Managing Director Yoshinori Suzuki, President and CEO Koichiro Miyahara, and Akira Kiyota of the Japan Exchange Group.
As of March 2018, the five largest stocks listed on the Tokyo Stock Exchange included (in millions of Japanese yen):
- Toyota Motor Corporation (¥222.6)
- NTT DOCOMO,INC. (¥105.931)
- Mitsubishi UFJ Financial Group, Inc. (¥96.883)
- SoftBank Group Corp. (¥87.5)
- Keynence Corporation (¥80.3)
Tokyo Stock Exchange (TSE) and Other Major International Exchanges
In addition to the Tokyo Stock Exchange, other major trading exchanges worldwide include: the New York Stock Exchange (NYSE), the Nasdaq, and the London Stock Exchange (LSE). Each exchange has specific listing requirements that owners must meet prior to offering their securities for trading.
In general, these include regular financial reports, including audited earning reports, and minimum capital requirements. For example, the NYSE has a key listing requirement that stipulates a company must have a minimum of $4 million in shareholder’s equity and pre-tax income in the last fiscal year or two of three most recent fiscal years of $750,000 in its first of four categories. Nasdaq requires listers to meet aggregate pre-tax income in the prior three fiscal years of >$11 million and a minimum bid price of $4.
With strong 2017 market conditions, the past year was a comeback year for IPOs. More than 1,700 companies listing their securities for trading for the first time. This was the highest number of IPOs in a year since 2007.