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Nasdaq Japan to Suspend Operations

August 16, 2002

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TOKYO (AP) _ Nasdaq Japan is expected to announce Friday that it will suspend all new listings on the two-year-old stock market and discontinue trading by the end of the year, a major Japanese financial daily said.

The market’s board members representing U.S.-based Nasdaq Stock Market Inc., software giant Softbank Corp. and several brokerages are scheduled to vote on the decision at a special meeting, the Nihon Keizai newspaper reported in its Friday morning edition.

The decision to end the fledgling market because of huge losses would set back Nasdaq’s hopes of allowing round-the-clock equity trading and would deal a blow to the nearly 100 companies now listed on the exchange.

Japanese media had reported this week that the U.S. partner was preparing to pull out, despite Softbank’s denial that it would liquidate the company.

Softbank and the U.S. Nasdaq each owns 43 percent of the venture, which began trading in June 2000 as a section of the Osaka Securities Exchange.

Investors are expected to be able to trade issues listed on Nasdaq Japan until the end of this year, the Nihon Keizai said. After that, the shares will trade on the Osaka bourse, the business daily said.

Despite a promising start, Nasdaq Japan failed to attract the large number of domestic and global investors. The lack of liquidity made trading difficult and left shares vulnerable to erratic price swings.

By the end of last year, Nasdaq Japan had lost approximately 5.3 billion yen ($45.3 million), the Nihon Keizai said.

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