Thinking Points
- In continuation from last week’s difficult-to-access Sapporo Securities Exchange article, here is a list of 26 companies exclusively listed on the Fukuoka Stock Exchange.
- Fukuoka, the home to Japan’s 4th largest metropolitan area, is a thriving business center in the Kyushu region.
- The Fukuoka Stock Exchange list contains several interesting companies like fish feed maker Higashimaru (FSE: 2058) and packing material makers Ohishi Sangyo (FSE: 3943) and Maruto Sangyo (FSE: 7894).
Last week, I made a list of 17 companies exclusively listed on Sapporo Securities Exchange. The rationale is that less accessible stocks are also probably less efficiently priced. A phone conversation with Jan Svenda (who researches obscure OTC stocks) combined with researching Hokuyaku Takeyama (SSE: 3055) triggered this line of thought.
As an extension, I’ve compiled a list of 26 companies exclusively listed on the Fukuoka Stock Exchange. By the time this post is published, I will be freezing in Fukuoka!
Where is Fukuoka?
Sapporo is the capital of Hokkaido, the northernmost prefecture (and region) of Japan. It is, by far, the largest prefecture in Japan by land area. In contrast, Fukuoka is a key prefecture of Japan’s southernmost region Kyushu.
The Kyushu region consists of 7 prefectures:
- Fukuoka
- Saga
- Nagasaki (yes, the atom bomb)
- Kumamoto
- Oita
- Miyazaki
- Kagoshima
Total population in the region is about 13 million, 40% of which live in Fukuoka. Fukuoka metro is Japan’s 4th largest metropolitan area behind Tokyo, Osaka, and Nagoya metros.
26 exclusive companies listed on the Fukuoka Exchange
First, here is a link to the Google spreadsheet I compiled.
In the spreadsheet, there is a column named “Q-Board”. Q-Board is Fukuoka Stock Exchange’s growth listing (vs. Sapporo’s “Ambitious”).
Personally, I find Higashimaru (FSE: 2058), Ohishi Sangyo (FSE: 3943), and Maruto Sangyo (FSE: 7894) most interesting at first glance, in that particular order.
My interest in Higashimaru has little to do with whether the company is an investment opportunity. The company piqued my interest when I learned Higashimaru is not only a major fish feed maker, but is also Japan’s #1 feed maker for Kuruma Shrimp. This caught my eye mainly because of my involvement in the seafood industry; we are in the middle of developing a shrimp farm (Vannamei Shrimp) in the Philippines.
As for Ohishi and Maruto, I’ve been interested in packing material since reading about Chuoh Packing (NSE: 3952), which makes value added corrugated cardboard boxes and bubble wrap. These materials are too expensive to procure from far away places (like China), which means facility location plays an important role. I wonder if the same is true for Ohishi’s molded pulps and Maruto’s laminate films.
A little bit about the banks
It’s difficult to ignore the fact that 5 of the 26 companies exclusively listed on the Fukuoka Exchange are banks. Here’s a quick bit about regional banks in Japan. There are two main associations: Regional Banks Association of Japan (RBAJ) and The Second Association of Regional Banks (SARB).
The key difference between member banks of the two associations is the history.
In short, RBAJ banks have a long history of operating as banks while SARB banks were more or less a “poor man’s bank” until they were forced to either become a bank or get absorbed by a bank in 1989.
The poor man’s bank is typically referred to as “Mujin” or “Tanomoshikou”, a local financing system with a long history in Japan. Essentially, local people and businesses create a group, then pitch in every month to remain a member. When members need financial assistance, an auction or lottery is organized. The auction/lottery winner(s) is issued a loan. Here is a Wikipedia article that describes the general idea. Overall, RBAJ banks tend to be larger in scale while SARB banks are smaller. Both are heavily focused on local business lending.
In closing
The Fukuoka Stock Exchange contains more than a few interesting companies. That said, I’m not familiar with many of the industries these companies operate in (yet). Hence, I have not been able to identify a clear discrepancy in pricing like I did with the Sapporo Securities Exchange and Hokuyaku Takeyama (SSE: 3055). If I decide to research one of the companies on the list, I will be sure to write an article and publish it here!
