The cash equity markets of the Tokyo and Osaka stock exchanges have successfully combined, with no reported issues after a fortnight of operating under the combined Japan Exchange (JSX) name.
The cash equity market integration between Tokyo Stock Exchange (TSE) and Osaka Securities Exchange (OSE) was completed two weeks ago.
“Since the TSE and OSE merger we have not seen any system issues so far,” says Akihiro Ohara, director and head of sales trading, Japan, for global equity flow business in Japan at Societe Generale. “That’s great but unfortunately for recent market conditions and holiday seasons, overall TSE turnover has not increased much since the merger.”
Official exchange statistics are not yet available to corroborate relative volumes at the beginning compared to the end of July.
The merger has resulted in several changes in the way the exchanges operate. Firstly, the OSE main markets (OSE First Section and Second Section) were integrated into the TSE main markets (TSE First Section and Second Section).
Following that integration, the cash equity market will operate under TSE listing and trading rules.
“Adding the traders’ point, OSE names used to close at 15.10, which was 10 minutes after the TSE, but now all finish at 15:00. We think there will be less operational risk from all cash markets closing at the same time,” says Ohara.
The operation of JASDAQ was transferred from OSE to TSE as the newly established TSE JASDAQ.
Trading in the integrated cash equity market will be conducted on TSE trading systems. “Arrowhead” will be used for the auction market and Tokyo Stock Exchange Trading NETwork System (ToSTNeT) for off-auction trading.
“Investors now have their eyes on those names which will be included on Nikkei 225 names that were previously at OSE,2” says Ohara. “The top candidates are Nintendo, Nidec and Murata. These candidates’ volumes have increased after this merger.”
Nikkei will announce the index reshuffle in October.