Meet Atsushi Saito, President of the Tokyo Stock Exchange
Friday, September 07, 2007JEFF YASTINE: And speaking of the Tokyo stock exchange, in a break with custom, a 67-year-old former investment banker is now heading up that market, named to the post in June. Observers hope the new president will make the exchange more efficient and take advantage of Japan's nearly $12 trillion worth of household assets. From Tokyo, Lucy Craft reports.
LUCY CRAFT, NIGHTLY BUSINESS REPORT CORRESPONDENT: Atsushi Saito, new president of the Tokyo stock exchange arguably has one of the toughest jobs in Japan: making the snafu-plagued, clubby and insular Tokyo stock market modern and internationally competitive. Saito concedes Japan's peerless manufacturers and rich capital base have allowed the stock market to grow complacent, scarcely touched by the financial revolution unfolding overseas.
ATSUSHI SAITO, PRESIDENT & CEO, TOKYO STOCK EXCHANGE: Tokyo exchange has spent quite a long time in vain, I should say, I have to confess that because they enjoyed very good market share on the cash. So they were not so much keen concern on the derivatives products or any other future products, something like that, exotic products.
CRAFT: The stats are sobering, foreign company listings down 80 percent off their peak, average return on equity for Japanese companies about half the U.S. rate, trading volumes, a fraction of the turnover on the Shanghai and Shenzhen exchanges. Tokyo's glitch-prone trading system is one reason the world's second largest stock exchange has never come close to punching its weight.
SAITO: The top priority is very clear, that's IT, information technology
CRAFT: Saito, who spent 35 years with Nomura Securities, recently headed a government agency which turned around zombie companies, like retailer Daiei. The restructurings helping Japan shake off recession to score a record-long growth streak. Saito is a rarity at the exchange, normally run by retired bureaucrats or men promoted from within. Nomura Securities banker Takeo Sumino is a former colleague.
TAKEO SUMINO, MANAGING DIR., NOMURA SECURITIES: There are bureaucrats. There are regulators. There are also investors and there are also foreign capitals, foreign companies and even foreign stock exchanges. And I think, how do you communicate? How do you negotiate and how do you actually reach agreement with those people is very important. And I think Mr. Saito's background allows himself to be communicating leader for the Tokyo stock exchange and for the Tokyo capital markets.
CRAFT: Still, Mitsubishi UFJ Securities economist Richard Hostetter says Saito's latitude for action will be limited by Japan's risk-averse corporate culture.
RICHARD HOSTETTER, SR. ECONOMIST, MITSUBISHI UFJ SECURITIES: He's much more likely than any of his recent predecessors to do the right things to get the systems running better, to cope with these conflicts of interest, to inspire the listed companies who are traded on the exchange to be a bit more open-minded, to act a bit more aggressively, to tinker with their balance sheets in ways that are favorable to shareholders and earnings growth over time. Yes he can do that to a certain extent, but most of the big changes that need to happen are changes that he can't really trigger, that need to happen elsewhere, if you like.
CRAFT: Tokyo's quest to become the number one stock exchange in Asia should gain some traction in 2009. That is when the exchange is set to finish overhauling its antiquated trading system and to issue its initial public offering. Lucy Craft, NIGHTLY BUSINESS REPORT, Tokyo.
