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[TOKYO] As starts go for Japan's initial public offering market, this year's has been pretty bad.
When Willplus Holdings Co, a car dealer, opened below its offer price on its debut last week, it became the sixth of 21 IPOs to do so this year. In the rush of initial share sales in 2015 that saw 98 companies go public, the most since 2007, just 8 started trading below their IPO price, according to bourse operator Japan Exchange Group Inc.
The tougher times are partly a consequence of a rout in Japanese equities that sent the benchmark Topix index to the worst start to a year on record. This weighed on investors' ability to free up funds to buy new offerings, according to Securities Japan Inc.
"Individual investors were unable to make a move given the losses they suffered as the market fell at the start of the year," said Masayuki Otani, chief market strategist at Securities Japan.
"Many investors had to stay away from IPOs."
While 23 per cent of IPOs in 2014 began trading below their offer price, only 8 per cent did so last year.
So far in 2016, 29 per cent fell below that level.
Companies getting a poor reception this month included Akatsuki Inc, a maker of games for mobile devices that opened 8 per cent below its offer price, and life-sciences firm PhoenixBio Co, which started down 2.1 per cent.
Japan's IPOs peaked at 204 in 2000 during the information-technology bubble.
They slumped to 19 in 2009 after the global financial crisis and have been rising steadily ever since.
In 2014, 18 of 80 IPOs started trading below their offer price.
This year's crop can't blame all their woes on the stock-market selloff, according to Mito Securities Co.
The Topix has recovered about half its losses from a Feb 12 low and is still down 12 per cent this year.
"Many companies lacked attractiveness," said Toshiaki Iwasaki, an analyst at Mito Securities in Tokyo.
"There's a lot of merit in going public for the underwriting company and the listing company, but this is irrelevant for investors. If it's not attractive, they won't buy."