It is important to have a system that enables start-ups to raise enough capital necessary in the stock market when they go public. The securities industry should be more transparent about how a decision is made regarding the initial public offering (IPO) price, which affects the amount of funds that can be raised.
How much a newly listed company receives is determined by its IPO price -- at which shares are sold to investors prior to the start of actual trading -- and the number of shares issued. The opening price is the price fetched in the first transaction after a company's market debut.
Opening prices in Japan are 50% higher than the IPO price on average, much higher than in such countries as the United States and Germany, where the average increase is about 20%.
