recent development of tokyo stock exchange

Recent Development of Tokyo Recent Development of Tokyo Stock ExchangeStock Exchange

May 27, 2009

Tomoyoshi UranishiSenior Executive Officer

Tokyo Stock Exchange Group, Inc.

Tokyo Stock Exchange Historical Tokyo Stock Exchange Historical HighlightsHighlights

May 15, 1878 “Tokyo Stock Exchange Co., Ltd.” established.

– Trading of the first listed stock of “Tokyo Stock Exchange Co., Ltd” commenced on July 15, 1878.

– Trading of stock of the 1st National Bank commenced on September 20, 1878

November 1, 2001 Tokyo Stock Exchange Inc. established after demutualization of TSE

August 1, 2007 Tokyo Stock Exchange Group, Inc. established

April 1, 1949 “Tokyo Stock Exchange” in the present form founded (opened on May 16)

札幌： Sapporo Securities Exchange

No. of Listed Companies ： 85

Trading Value ： 8 bil. JPY

東京： Tokyo Stock Exchange Group, Inc.

No. of Listed Companies ： 2,389

Trading Value ： 576,390 bil. JPY

JASDAQ Securities Exchange, Inc.



名古屋： Nagoya Stock Exchange, Inc.



福岡： Fukuoka Stock Exchange



大阪： Osaka Securities Exchange Co., Ltd.

No. of Listed Companies ： 1,031


Securities Markets in Japan Securities Markets in Japan (end of (end of 2008)2008)

Percentage of Trading Value

Others4.8%

Tokyo95.2%

Positioning in Relation to Major Positioning in Relation to Major ExchangesExchanges

1.21.31.51.6

2.6

5.6

0

TSE Shanghai Hong Kong Korea Australia Shenzhen

0.7 0.7 0.6

1.31.4

3.1

0

1

2

3

4

5

TSE Shanghai Hong Kong Australia Bombay National(India)

(USD Tn)

(USD Tn)

Asia and Oceania: Market Capitalization (2008 Year-End)

Asia and Oceania: Total Value of Share Trading (2008)

Stock Market Trend (2008.3.31 ＝ 100POINT)

Source: World Federation of Exchanges

Largest market in Asia and one of the largest exchanges in the world

40

50

60

70

80

90

100

110

120

130

08.03

08.04

08.05

08.06

08.07

08.08

08.09

08.10

08.11

08.12

09.01

09.02

09.03

09.03

09.04

S&P 500

TOPIX

（ Point ）

Investor CategoryInvestor Category

NorthAmerica25.54%

Others0.26%Asia

25.19%Europe49.01%

Brokerage Trading by Trading Value 2008 Shareownership by Market Value 2008

◆For the past ten years, trading value by Foreign Investors has increased greatly.

On the other hand, the share of domestic financial institutions has decreased.

◆Individual Investors, whose share had slipped in late 90s, are on the rise again

with the widespread of online trading in recent years.

(breakdown of Foreigner)

*Domestic institutional investors : Trust banks, Investment trusts, Life & Non-Life

Source: All domestic stock exchanges (ex. Jasdaq)Source: TSE

Bussiness Corps,

21.30%

Foreigners, 27.60%

Individuals, 18.20%

Domestic institutional

investors

, 10.40%

Banks, 4.70%

Others, 17.80%

Foreigners, 64.8%Individuals, 21.3%

Domestic

institutional

investors

, 10.1%

Banks,

7.7%

Others,

3.8%

*

*

Facing the financial crisis, what can the TSE do ?As a universal exchange, the TSE will

・ Strengthen derivatives markets

・ Enhance the function of the cash market.

・ Improve the quality of the market.

Given the current financial situation, the TSE will

・ Bring off–exchange trade and OTC derivatives trade to the TSE market in order to achieve a sound and integrated market.

・ Expand business in the field of information service and clearing service

for the realization of a stable and efficient financial market.

・ Promote confidence in the market by improving the corporate governance of listed companies and respecting shareholders’ rights.

Socially Responsible Investment Socially Responsible Investment ①①

Background– To promote the enterprise’s

environmental efforts through creating index.

Calling in the investment capital of the financial market 1) will become incentive for an environmental effort by the companies 2) will its enhance competitiveness in the market .

Project – To evaluate the framework of

environmental effects.– Examine use of the framework (index).– Promote information disclosure.

① To reduce the burden on the environment.

③To promote

Communication of

environmental issue

between investors

and companies

②To use the service and

Products with least impact

on environment

•Energy saving and the prevention of global warming•3R(Reduce, Reuse, Recycle)•Pollution prevention•Conservation of nature•Control of water resources etc ・・・

Working Group by METI on June, 2008Working Group by METI on June, 2008

TSE is working to develop an environmental focused index which is suitable to the needs of investors.

And now ・・・And now ・・・

(METI : Ministry of Economy, Trade and Industry )

Socially Responsible Investment Socially Responsible Investment ②②

TOPIX 1000 TOPIX 1000 CSR Tokyo Stock Price Index

ETF (Exchange Traded Funds) 　– The first environmental index ETF "Listed Index Fund FTSE Japan Green

Chip 35 (1347)“ was listed on the April 28,2009.

TOPIX 1000 CSR Index– The 1,000 domestic issues listed on TOPIX that have the highest market

capitalization and liquidity (market value) will be eligible for the index. TOPIX is composed of all Japanese common stocks listed on the TSE First

Section.(1,705 listed companies as of April 30, 2009)– These 1,000 issues will be screened through a process that incorporates

the elements of CSR. TSE will collaborate with The Good Bankers Co.,Ltd. and Mitsubishi UFJ Research

and Consulting Co.,Ltd., companies with expertise in CSR research in Japan. This is a negative-screening index which proper constituents are screened out

based on the CSR research.

Emissions Trading Emissions Trading ①①

BackgroundWe are fully aware that global environmental issues are of paramount

importance to the global community and should be addressed by both the public and private sectors.

With the adoption of the Kyoto Protocol, economic instruments have been introduced to reduce greenhouse gases. Trading in carbon emissions credits or allowances has been ongoing in Japan and other countries, and is expected to expand further in the future.

TSE Group will strive to make as great a contribution to emissions reductions as possible from the perspective of a securities exchange, and make every effort to create a carbon market.

TSE Group will strive to make as great a contribution to emissions reductions as possible from the perspective of a securities exchange, and make every effort to create a carbon market.

Tokyo Stock Exchange Group’s Business Plan for FY2009 -Action Plan 2009- Medium-Term Management Plan (FY ending 3/31/2009 – FY ending 3/31/2011) for the 2nd Year as of March 24 、 2009

III. Priority Measures for FY2009 ② Increase the depth of the cash market◎ Consider establishment of a carbon market

Emissions Trading Emissions Trading ②②

　

In response to the changing circumstances surrounding carbon trading in Japan.

We plan to restart the study group.

There are still some topics we must clarify in order to establish a carbon market, including those resulting from the changing circumstances.

We set up the “TSE Carbon Market Study Group” on April 28, 2008We set up the “TSE Carbon Market Study Group” on April 28, 2008

And now ・・・And now ・・・

The members of the Study Group– Experts in fields related to emissions trading were invited to serve

as commission members and related government officials as observers.

The topics under review– The following details regarding the framework design of the

exchange have been examined: tradable products / trading methods / trading participants / settlement and clearing methods /others

– Summary Minutes of our meetings and a Member List are on our web site: http://www.tse.or.jp/english/rules/carbon-m/index.html

CSR CSR ActivitiesActivities

TSE Academy(April,2004 -) – Promote financial knowledge for

individuals as well as school teachers and students.

Afforestation activity (June,2004 -)– Plant trees that is corresponding to the

number of listed companies.

Energy saving at TSE (July,2008-)– TEAM minus 6%*– Emissions electrical consumption

reduction target to -12% by 2010.

CSR report(September,2008-)– On the policies and progress of our CSR

activities.*The team minus 6% is a title of the project that Japanese Government to control the heat-trapping gas assumed to be a cause of global warming.

Thank you for your attention

Tokyo Stock Exchange Group, Inc.

Website: http://www.tse.or.jp/english/index.html

This information has been written according to various sources that are believed to be reliable but the Tokyo Stock Exchange Group, Inc. (TSE) cannot guarantee its accuracy or integrity. The information referred to above is nothing more than what TSE believes to be correct at the time of printing. The purpose of this material is solely for reference, is not for sale and does not have any purpose in inducing the trading or selling of specific securities. TSE hopes that you will confine the use of this material only to yourself. Copyright 2008 Tokyo Stock Exchange Group, Inc. All Rights Reserved. 2-1 Kabuto-cho, Nihombashi, Chuo-ku, Tokyo 103-8224 Japan, Tokyo Stock Exchange Group, Inc. Corporate Communications.

recent development of tokyo stock exchange

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