Shares in the Japanese subsidiary of McDonald's got off to a flying start when it listed in Tokyo, mainly on the back of excitement among retail investors.

Shares in the Japanese unit of the US fast-food giant McDonald's Corp first traded at 4,700 yen (�27; $38), up 9.3% from its initial price of 4,300 yen, providing one of the few bright spots for the feeble Tokyo stock market, which has recently traded around 16-year lows.

But while individual investors were keen to buy into a brand that has become familiar on the Japanese market, institutional funds were less eager.

Big investors worried that the unit's weak profits did not justify its flotation price, which values the company at 38.9 times its earnings, high compared with its rivals.

"Popularity among retail investors made this price possible. But I'm not so sure about its medium- and long-term performance, given the falling growth in its earnings," said Shuji Terao, senior portfolio manager at Mitsui Marine Asset Management.

"There is a fear that its share in the burger market is already so large that there is some concern about how much more it can expand," said Michael Jacobs, analyst at Dresdner Kleinwort Wasserstein.

Big burgers

McDonald's Japan, which opened its first store 30 years ago in the heart of Tokyo's Ginza shopping district, operates 3,678 outlets, making it the largest restaurant and burger chain in the country.

The firm says its listing on Tokyo's JASDAQ market, its first flotation on a foreign stock exchange, will enable it to triple the size of its business in Japan.

The company plans to build on its already huge Japanese network with new restaurants in schools, hospitals and even on the world-famous bullet train.

McDonald's Japan is currently 55% owned by the US parent and 41% by the family of Den Fujita, its president.

Sales of McDonald's Japan totalled 357.9bn yen last year.