Toshiba Shares Rise 16% on TSE-1 Return Announcement

Japan’s Toshiba shares have hit the highest level in three years after the company revealed plans to return to the TSE-1 section of the Tokyo and Nagoya stock exchanges after a long absence.

The move date is scheduled for the 29th of January, meaning that the company’s shares will be added to market indexes and enable domestic active funds to buy the stock. 

The return to TSE-1 will enable Toshiba to rejoin the Topix index at the market close on the 25th of February, special-situations analyst Travis Lundy told Bloomberg. Lundy also forecasted that the inclusion will require passive funds to buy 58 million shares, or 13% of outstanding stock.

“A Topix inclusion of this size is a rare species … long-suffering activists may rejoice. This creates liquidity for a partial exit”, he commented.

The move comes after Kurumatani said Toshiba is ready to restart pursuing acquisitions and business expansion in December. He also reaffirmed Toshiba’s intent of divesting its stake in former flash memory unit Kioxia.

“One thing that changed is that I’m in charge now … the board is also applying very stringent standards to acquisitions. It’s a completely different company when it comes to the rigor brought to thinking about and screening deals,” Kurumatani said.

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