Thu, Nov 05, 2015 - Page 15 News List

Japan Post companies net US$12bn in IPO

RECORD OFFERING:The biggest IPO since Alibaba’s, the sale of Japan Post and its banking and insurance units’ shares drew on public trust in the 140-year-old firm

AP, TOKYO

Japan Post Holdings Co president Taizo Nishimuro pauses during an interview at the company’s headquarters in Tokyo on Monday.

Photo: Bloomberg

Shares of Japan Post Holdings Co yesterday surged nearly 26 percent in their trading debut, after the company and its banking and insurance units raised a combined ¥1.44 trillion (US$11.9 billion) in the world’s biggest initial public offering (IPO) this year.

The long-awaited sale of shares in the state-owned company was the biggest since Chinese e-commerce giant Alibaba Group Holdings Ltd (阿里巴巴) raised US$25 billion in its IPO in September last year.

SAVINGS

The Japan Post sale is meant to tease out some of the more than US$14 trillion that Japanese have squirreled away in savings accounts.

Some of the IPO funds will help pay for rebuilding from the 2011 tsunami disaster.

The massive offering helped push the benchmark Nikkei 225 to its highest level in more than two months by midday, though it later gave up some of those gains, rising 1.3 percent to 18,926.91.

Japan Post Bank shares surged 15.2 percent and Japan Post Insurance shares rocketed 55.9 percent.

“Through privatization, we can play a role in revitalizing the Japanese economy,” Japan Post president Taizo Nishimuro told reporters after ringing a bell at the Tokyo Stock Exchange to start trading.

The IPO comes more than a decade after Japan began privatizing its postal system and the postal banks that are the backbone of the country’s massive household savings pool.

HIGH DEMAND

Japanese have strong trust in their more than 140-year-old postal system, which has 24,000 outlets across the country. Shares in all three companies were in high demand and sold at the top end of the indicative price range.

Japan Post remains profitable, but only thanks to fees paid by its banking and insurance units for operating inside post offices. All three businesses face a shrinking market as Japan’s population ages and declines.

Only 11 percent of the government’s equity in the three companies was sold. Of the shares on sale, 80 percent was reserved for domestic investors and 20 percent for foreign buyers.

The government plans to sell more shares in additional steps, but is expected to keep majority ownership of Japan Post.

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