Citigroup To List In Japan

Citigroup (NYSE:C) has announced their desire to list on the Tokyo Stock Exchange. The strategic move will place the Citigroup brand front and center within the Japanese investor mindset. If it makes sense to buy scandal plagued Nikko Cordial because it offers entree into the world’s second largest equity market than it also makes eminent sense to list your shares on their exchange.

Here are a few items which may start to change the current NYSE centric thinking about the Citigroup.

The hours of operation will be radically different. Citigroup will be trading almost 24 hours a day. As bad or good news breaks in Asia and rolls through Europe investors will be able to take advantage immediately, assuming that you are awake and out of bed.

Will Citigroup become a lightening rod for foreign market sentiment?
There will also be some slightly variation to available trading days as Japanese holidays differ from those observed by the NYSE. Citigroup stock will be trading on September’s Labour Day and July 4. But the Emperors’ birthday will be strictly observed usually just before Christmas.

Many Japanese institutions and retail investors will now more easily purchase, monitor and sell Citigroup. Expect higher levels of Japanese institutional interest and perhaps a positive bull impact as they acquire a now domestically traded yen denominated issue.

If Citigroup shares are to trade in Yen there will there be ramifications in the Yen carry trade? Or will the Yen carry trade have ramifications for Citigroup share values as it becomes another hedge tool for other transactions.

Citigroup’s current dividend yield is approximately 4.1%. Bloomberg reports One Year Japanese Government Bonds yield 0.82%. The 30’s yield 2.58%. Carry trade and arbitrage issues aside will the Japanese investor find the yield attractive and just keep buying whenever American investors are selling.

The question is one of mindsets. Western Investors of Bank Stock typically act on a shared narrative. New Japanese players will view the narrative differently. The Japanese market has immense liquidity as a result of hyper low interest rates. Citigroup shares will benefit but will NYSE centric thinking investors know how to handle it.

Special note; Other western stocks listed on Tokyo are Dow Chemical (NYSE:DOW), Boeing (NYSE:BA) and JP Morgan (NYSE:JPM). We have all heard the stories about global economics. But did you know that the Dow 30 is perhaps a stealth candidate for Japanese investor sentiment.