6 days ago
Minimum Investment Threshold in Stocks: Use Lowering Amount to Stimulate Individual Trading
If people can invest in stocks with more affordable amounts of money, the base of individual investors, including those in younger generations, will be expanded. It is hoped that the benefit of increased corporate value will lead to asset building for a wide range of households.
The Tokyo Stock Exchange currently urges companies to make an effort to allow investors to buy shares with an investment of less than ¥500,000 when they go public.
With their own efforts progressing, such as splitting stocks, the average minimum investment threshold in the Prime Market for large companies has dropped to about ¥260,000. However, this is still about eight times that of the United States and is a stumbling block to broadening the base of individual investors.
The TSE has announced a new policy of recommending that listed companies lower the minimum investment threshold to around ¥100,000. This will make it easier for individual investors to purchase stocks.
Examples of well-known companies with high minimum investment thresholds remain, such as Fast Retailing Co., which operates the Uniqlo brand, at about ¥4.8 million, and Nintendo Co. at about ¥1.2 million. It is hoped that the trend of lowering the minimum investment threshold will spread throughout the entire market.
The government is promoting policies to stimulate the economy by supporting 'from savings to investments' or the shift of households' financial assets, heavily weighted toward savings, into investments. It is important to increase the number of individual investors by lowering the minimum investment threshold.
The new Nippon Individual Savings Account (NISA) investment program, in which gains on small investment are exempted from tax, started in January 2024, and younger generations are increasingly interested in asset building. If small amounts are invested in a variety of stocks, it will be easier to lower the overall risk of the investment.
Although the TSE's request is not mandatory, companies need to work on it in light of the changing times.
With increasing demands from investors to raise share prices by streamlining management, there is a growing move by companies to sell cross-shareholdings that they had held to maintain ties with business partners, among other reasons.
Securing stable shareholders is a major issue. If the number of individual shareholders who sympathize with a company increases, they will be able to serve as such shareholders.
However, investors' demands are not uniform. There may be more than a few shareholder proposals that may be confusing to the corporate side. It is necessary to deepen discussions on how to respond to shareholders.
As the number of shareholders increases, companies will be burdened with tasks such as the cost of sending physical documents. It is essential to reduce costs by promoting digitalization.
Last summer, the Nikkei Stock Average recorded its largest range of drop, and this year, the stock market has been volatile due to the high tariff policy of the United States and other factors.
While it is vital to increase the number of individual investors, both investors and the financial industry must not forget the importance of thorough education about investment risks.
(From The Yomiuri Shimbun, June 3, 2025)
