MOF Plans to Slash JGB Listing Costs

Tokyo, July 20 (Jiji Press)–Japan’s Ministry of Finance plans to slash the listing fees for Japanese government bonds from fiscal 2008 through talks with the Tokyo, Osaka and Nagoya stock exchanges, ministry officials said Friday.

As part of its fiscal consolidation efforts, the ministry hopes to cut annual listing costs by more than 80 pct from the current 56 million yen, the officials told Jiji Press.

Currently, five types of JGBs, whose maturities range from two to 30 years, are listed on the three stock exchanges. The number of listed JGB issues totals 276 at each exchange.

The ministry pays a fee of 50,000 yen to 150,000 yen each time a new issue is listed. In addition, the ministry pays an annual fee of 50,000 yen to 200,000 yen to keep each issue listed.

The total annual fees paid to the Tokyo Stock Exchange reach 20 million yen. A similar amount is paid to the Osaka Securities Exchange, while fees to the Nagoya Stock Exchange are slightly lower at around 16 million yen.

Meanwhile, JGB trading on the stock exchanges is lackluster as most JGB issues change hands via brokerage houses in over-the- counter trading.

In general, the TSE-listed JGB issues change hands only once or twice a week, while there have been no transactions for the JGB issues listed on the OSE and the NSE for some time, an informed source said.

The JGB listing costs are a waste of money, a senior ministry official said.

The ministry is negotiating with the TSE in hopes of cutting its annual listing costs to several million yen. To the OSE and the NSE, the ministry is requesting total fee cuts to zero while hinting at possible JGB delisting from both exchanges.

The balance of the country’s total outstanding JGBs stood at 674 trillion yen at the end of March this year. The ministry needs to continue massive JGB issuance in fiscal 2008 and later as social security costs are set to balloon.

The ministry plans to cut total JGB-related costs, including listing costs, by more than 60 billion yen in the three years through fiscal 2009.END

(c) 2007 Jiji Press English News Service. Provided by ProQuest Information and Learning. All rights Reserved.