TOKYO • Japan Post Group is targeting individual investors for at least 70 per cent of its initial public offering (IPO) on the assumption that the recent global market turmoil will not damp their appetite for stocks, according to people with knowledge of the matter.
The postal and banking giant is seeking to sell more than 1 trillion yen of shares to Japan's retail investors, the people said, on condition of anonymity. The rest of the 1.5 trillion-yen offering will target foreign and local institutional investors.
A large retail offering would fit with Prime Minister Shinzo Abe's plans to encourage households to invest more of their savings.
His government is selling stakes in Japan Post Holdings and its banking and insurance units in the nation's biggest IPO this century to raise funds for rebuilding following an earthquake and tsunami in 2011.
The listing, which will raise the firm's market value to an estimated 7 trillion yen (S$83 billion), will not just reap a windfall for public coffers but also help Japan's government to shake up smaller regional banks that have resisted pressure to consolidate.
Its sole shareholder, the Finance Ministry, will list all three entities simultaneously, allowing investors to value each against its peers in the distribution, banking and insurance industries, government officials say.
Japan's government hopes this will breed a more competitive spirit among regional banks as Japan Post Bank, one of the two units of Japan Post Holdings, becomes more market-oriented, using its balance sheet heft - similar to Japan's three "megabanks" - and network of 24,000 post offices, nearly twice the nationwide total of bank branches, to set the weather.
Nomura Holdings will underwrite the biggest part of the sale to Japanese individuals, said the people involved. The other global coordinators are Goldman Sachs Group, JPMorgan Chase and Mitsubishi UFJ Morgan Stanley Securities.
Japan Post Holdings will announce the details of the IPO as soon as today, with a view to listing on the exchange on Nov 4, the people involved said. Postponing the sale remains an option for the Finance Ministry due to the global market volatility, they said.
The Nikkei-225 Stock Average erased this year's gains on Tuesday before rebounding yesterday with a 7.7 per cent advance, the most since October 2008.
Spokesmen for Japan Post Holdings and Nomura declined to comment on the IPO. Finance Ministry officials also declined to comment.