Accounting Standards

Konami Corp Voluntarily Delists from the NYSE

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Konami Corp photo
The Konami gaming exhibit at the 2014 Global Gaming Expo in Las Vegas in October. Konami is a world leader in casino gaming and systems.

Konami Corporation's delisting from the New York Stock Exchange on April 24th shows the growing maturity of the Japanese financial and capital markets. 

In the past few years, the Japanese government has passed a series of amendments to Japanese securities laws and regulations that have steadily improved the financial reporting and disclosure standards of companies listed on the Tokyo Stock Exchange, part of the Japan Exchange Group, thus narrowing the standards gap between the Japanese capital market and that of its close ally, the United States.

Konami Corporation, a $2 billion maker of gaming software based in Tokyo, joins Japanese giants Panasonic Corp and Kubota, which both delisted in 2013, to remove their stock listings from the New York Stock Exchange.  Konami initially listed on the NYSE in September 2002 in order to "diversify its opportunities for fund-raising and to raise the visibility of the KONAMI brand," according to a press statement released last month. 

Konami's stock was first listed on the Tokyo Stock Exchange (TSE) in 1988 and on the London Stock Exchange (LSE) in 1999.  Most of Konami's shares, 97.48% according to the release, are traded on the TSE, however, a small percentage, 2.23%, are still traded on the LSE.  The company will retain its listing in London.  Only a fraction of Konami's shares, 0.30%, traded on the NYSE.

For a software technology company as large as Konami to delist from one of the American exchanges is significant because of the dominance of U.S. companies in the industry and the strong attraction for non-U.S. software companies to be listed on either the NYSE or Nasdaq.  In the 2011 CSI, only 16 of the 104 companies in the software technology industry group were based outside the United States.

In its press release, Konami acknowledged the benefits over the years in its efforts to comply with U.S. securities laws and regulations and U.S. generally accepted accounting principles (U.S. GAAP).  "The company has made efforts to enhance disclosures for shareholders and investors with the goal of deepening their understanding of the company," as stated in the press release.

Japan has the third largest capital market in the world behind the United States and China.  As of March, the latest month in which data is available, the Tokyo Stock Exchange had a total market capitalization of $4.83 trillion.  By comparison, the size of the U.S. capital market is approximately $26.7 trillion, including both the NYSE and Nasdaq, and China has a capital market of approximately $7.8 trillion, including both the Shanghai and Shenzhen stock exchanges.

Konami Corp has been in the software technology industry group of the Credit Standards Index (CSI), a standards index published by CreditPulse, since the first one was published in 2005.  That year, the company ranked 58th out of 125 companies with a CSI score of 2.80.  In the most recent CSI industry rankings in 2011, Konami ranked 16th out of 104 companies with a CSI score of 2.40. 

In April 2013, Panasonic Corp left the NYSE after maintaining a listing for 42 years on the exchange.  Kubota, the industrial equipment manufacturer, followed suite in July 2013 after holding a listing since 1976.  However, not all Japanese stallwarts have left the U.S.  Sony, Canon, Toyota, Honda, Kyocera and Nippon Telegraph, among others, are still listed on an American exchange.