Kyushu Railway Co shares rose on their first day of trading in Tokyo after the Japanese government raised ￥416 billion (US$4 billion) selling its entire stake in an initial public offering (IPO).
The stock yesterday climbed 15 percent to ￥2,990 in Tokyo after touching ￥3,120 earlier. The government sold all 160 million shares held by Japan Railway Construction, Transport and Technology Agency for ￥2,600 apiece, or the top end of a marketed range.
The shares are to start trading in Fukuoka today.
Photo: Reuters
Three of the four major Tokyo IPOs this year are trading above offer price, according to Bloomberg-compiled data.
Line Corp’s US$1.24 billion July IPO, which included a New York and Tokyo listing, is the best performer, trading more than 40 percent above its offer price of ￥3,300 a share.
Komeda Holdings Co, the worst performer of this year’s deals, is down about 15 percent.
The JR Kyushu share sale is the nation’s largest railway IPO in more than a decade and is part of Japanese Prime Minister Shinzo Abe’s efforts to encourage Japanese to invest some of their ￥1,700 trillion household savings in the stock market.
The gains in the shares of the rail operator compare with the 32 percent surge in Line’s stock on its July debut.
JR Kyushu, which operates in Japan’s third-largest island, gets most of its profit from its station and real-estate businesses that include hotels and shopping centers as non-transportation services account for about half its sales.
“We’ve focused on non-rail assets and that’s led to synergies,” company president Toshihiko Aoyagi told reporters after the listing ceremony in Tokyo. “We want to step that up in the future.”
JR Kyushu would not get any money from the offering that was marketed in a range of ￥2,400 to ￥2,600. Three-quarters of the shares were sold domestically, with the rest going to overseas investors.
The IPO followed debuts in the 1990s by East Japan Railway Co and Central Japan Railway Co after the breakup of state-run Japan Railways in 1987.
“JR Kyushu has attracted attention for its real estate, station-building and hotel expansion, but in the medium to long term, its earnings will be under pressure,” said Minoru Matsuno, president of Value Search Asset Management Co, a Tokyo-based investment advisory firm. “They need to step up their growth plans.”
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