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1.1st Quarter Financial Results for FY Ending March 2008
The breakdown of the 1st quarter financial results for the fiscal year ending March 2008 is as follows.
Due to factors such as an 8% increase in daily average trading value from the corresponding period of the previous year, trading participant fees were up 5.8%. Information services-related revenue was also up 8.6% due to a continuous increase in the number of Market Information System real-time terminals, etc. On the other hand, however, listing-related revenue decreased significantly by 17.2% from the previous year, which was attributed to a considerable decrease in the number of listed stocks resulting from conversion of convertible bonds. As a result, operating revenue was JPY 19.035 billion, down slightly from the same period of the previous year.
As for operating expenses during the quarter, system-related expenses including system maintenance/operating expenses, consulting fees, etc. were up from the previous year, resulting in operating expenses of JPY 10.622 billion – a slight increase from the previous year.
As a result, during the quarter, operating profit was down 9.3% to JPY 8.413 billion and current profit was down 6.7% to JPY 8.922 billion from the corresponding period of the previous year. After deducting corporate tax and others, net profit for the quarter was down 4.6% to JPY 5.349 billion.
2. Alliance Discussions with NYSE Euronext and other exchanges
In the middle of July this year, Tokyo Stock Exchange, Inc. (TSE) once again held a seminar for market players in the UK at the Mansion House in the City of London. The main purpose of this seminar was to convey the current situation of the Tokyo market to market-related parties and raise the international profile of the TSE. With CEO Clara Furse of the London Stock Exchange (LSE) delivering a speech to the participants, the seminar was a great success, attracting nearly 150 people.
The TSE is also proceeding with discussions with the LSE on a business alliance, and both exchanges are currently seeking opportunities in emerging markets, including the LSE’s AIM market.
Also, NYSE Euronext and TSE group have been holding discussions on a specific cooperative alliance in various fields since the end of January 2007, resulting in the two sides reaching an agreement in the fields of listed financial instruments, IT, etc. As such, the details of the discussions will be publicized in the near future.
Moreover, the TSE will explore alliance opportunities with the Chicago Mercantile Exchange and the Chicago Board of Trade for futures trading and the Chicago Board Options Exchange for options trading, particularly focusing on working together in the Japanese government bond futures market. In addition, the TSE is also investigating possibilities for business alliances with exchanges in Asian countries including Singapore, Korea, China, and India.
By the end of this year, the TSE plans to create a clear vision for the areas in which and with which exchanges it will pursue alliances in promoting future business development.
3. Changes in Organizational Structure
On August 1, 2007, Tokyo Stock Exchange Group, Inc. (TSE Group) was established as a holding company, under which the present Tokyo Stock Exchange, Inc. operates as a market operating company. The TSE market operation company continues to hold the stocks of the Japan Securities Clearing Corporation, the Japan Securities Depository Center, and other related companies.
A meeting of the board of directors of the TSE Group was held on the same day to formally decide on the organizational structure and the roles of each officer. Details on such will be released at an early date.
A self-regulatory corporation will be set up under the holding company in the coming fall. However, the establishment of the corporation is expected to fall behind schedule as the implementation of the Financial Instruments and Exchange Law will be pushed back until the end of September 2007. Operations will begin under the new organizational structure in November at the earliest.
4. Others
As the process for taking in comments and opinions from the public has been completed, the TSE will implement the “Partial revision to rules for canceling executed transactions pertaining to exchange trading” on September 30, 2007. With the establishment of the rules for canceling executed transactions, all the measures the TSE was requested to take with regards to addressing erroneous orders will have been taken.
