Jun 25, 2020 (Nikkei) - Japan's Mothers index, an equity benchmark comprised of emerging companies, has gained strong momentum after hitting a bottom in mid-March.
Investors are buying on hopes that AI-led digital transformation, cyber security and greater use of the internet of things spurred by the coronavirus will fuel growth for many of the young businesses.
Mothers has skyrocketed over 80% since its March low, nearly double that of the Nasdaq's recovery in the same period. Other major global benchmarks have also rebounded following support by central banks and eases in city lockdowns. However, most indexes remain in negative territory in their year-to-date performance. Mothers, though, has risen 17%, beating Nasdaq's 12% gain.
On Wednesday, three companies debuted on Mothers. The listings were the first initial public offerings in over two months, as the market shake-up from the pandemic deterred many companies from stepping in.
Buy orders piled up for all three of the shares, which made it difficult for opening prices to be set.
In afternoon trading, one of the companies, Locoguide, which operates an online information service on shopping flyers to consumers, opened 2.3 times above its offering price. Opening prices for the other two companies including Ficha -- a developer of image recognition software based on machine learning -- had yet to be determined as demand for their shares continued to exceed supply.
With COVID-19 infections still being reported in Japan, especially in Tokyo, the opening prices of digital transformation-related companies that help people avoid direct contact with others have been strong.
Cyber Security Cloud, which listed on Mothers in late March, is developing a web security service that uses AI technology. Its opening price was more than twice the issuing price, with the share price now having risen to about six times the issuing price.
