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NTT DoCoMo to Be Listed on the NYSE

NTT DoCoMo to Be Listed on the NYSE

NTT DoCoMo has announced plans to list on the New York Stock Exchange in September, launching what is expected to be one of the most heavily traded American Depositary Receipt (ADR) programs by a Japanese company.

The listing will increase Japan's dominant mobile phone operator's funding options if it decides to invest further in the U.S. or raise its investment in AT&T Wireless, in which it has a 16% stake and which is set to be spun off from its parent this summer. It will also help DoCoMo raise its profile in the U.S. market, where it plans, with AT&T Wireless, to introduce a mobile Internet service similar to i-mode.

The New York listing brings DoCoMo into the company of an elite group of internationally minded Japanese companies willing to disclose information in line with U.S. generally accepted accounting practices (GAAP). In spite of the size of the Japanese economy and the growing international presence of Japanese companies, only 13 are listed on the NYSE and 17 on Nasdaq.

The move comes as record numbers of Japanese companies are expected to list on the New York Stock Exchange and Nasdaq this year, due to a change in attitudes among Japanese management and the narrowing gap between U.S. and Japanese accounting standards.

"There are more (Japanese) companies that see the advantage of being able to use ADRs as acquisition currency," said Masahiro Shimizu, managing director of equity capital markets at JP Morgan Securities in Tokyo.

The Bank of New York expects at least seven new listings - five on the NYSE and two on Nasdaq - this year, as Japanese companies overcome their traditional fear of the English language and of U.S.-style information disclosure. Of these, two companies listing on Nasdaq and two listing on the NYSE also have plans to offer new shares.

DoCoMo, which in the past year has raised concerns by making a string of overseas acquisitions worth $14.8 billion in cash, isn't expected to issue new shares at the time of its New York listing.

Washroom Trading
The popularity of mobile Internet services in Japan has given rise to a new social phenomenon: the washroom trader.

Unable to check how the market is doing during office hours on their desktop PCs, washroom traders sneak out with their mobile phones to the privacy of the toilet cubicles, where they can look up stock prices and even make trades.

For Japan's working population, buying stocks or even making fund transfers hasn't been easy until now. In 2001, more than 60% of NTT DoCoMo phone users have i-mode phones, which offer Internet access. Japan's second largest mobile phone operator, KDDI, offers a similar service known as EZ Web, and J-Phone has JSky.

Financial institutions have been quick to respond to the potential that the mobile Internet offers. The Bank of Tokyo-Mitsubishi has signed up 700,000 online bank account users, of whom just over 10% use mobile banking. DLJ Direct, the online broker, says that 15% of trades, and 30% of hits on its Web site, are made through i-mode.

Morgan Stanley Dean Witter recently introduced a service that allows users to view market data and stock information on i-mode. About 20% of Nomura Securities' 600,000 online customers use its mobile services as well. Users can transfer funds, pay bills, and even buy warrants on mobile phones.

However, banks and securities companies have found there's a limit to the services that can be provided. The small screen size and the high cost of downloading a lot of data limit the amount of information users want at any given time. As a result, the information on offer must be simple and easy to use.

Because mobile services should be available on the spur of the moment, they're limited to checking account balances, making fund transfers, and other simple operations. Even looking up investment trust prices is complicated. DoCoMo's new Java-enabled phones offer sophisticated graphics and the ability to download applications. But the amount of information transmissible at any one time is limited, explains Atsushi Kunishige, president of DLJ Direct SFG Securities, the online broker. For those who want to see a stock chart, the mobile phone screen is too small. "Trading on i-mode is a last resort," he adds.

Nomura, Japan's largest stockbroker, has hit upon a service that takes advantage of "always-on" mobile phones: an automatic alert that notifies a user when the price of a designated stock reaches a certain level. "As m-commerce spreads it could become possible to settle fees using the mobile phone," says Tomio Umezaki, manager of e-business and information technology initiatives at Bank of Tokyo-Mitsubishi. "We see huge opportunities." Clients of the bank can already make online payments to five different securities companies for transactions. Eventually, integrated circuit cards in mobile phones could be used to pay for train tickets and highway tolls straight from the bank. Services will start on a moderate scale next spring, says Masaaki Arai, senior manager of Bank of Tokyo-Mitsubishi's direct banking division.

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