Japan Post shares soar 16.5% above IPO price in trading debut

A worker of Japan Post Co collects postal items from a post box outside a post office in Tokyo.
A worker of Japan Post Co collects postal items from a post box outside a post office in Tokyo.PHOTO: REUTERS

TOKYO (BLOOMBERG, AFP) - Japan Post shares soared more than 16 per cent above their initial public offering price in a long-awaited Tokyo trading debut on Wednesday (Nov 4), after an US$11.5 billion (S$16.04 billion) share sale - the biggest so far this year.

The vast firm's holding company jumped to 1,631 yen (S$18.80), well up from a 1,400 yen IPO price, while its banking unit's stock jumped to 1,680 yen, against their 1,450 yen initial sale price. The benchmark Topix index rose 1.4 per cent.

Japan's government raised 1.44 trillion yen from the three-pronged IPO, which was oversubscribed within days of going on sale last month. Almost 80 per cent of the stock offered went to Japanese individuals as part of Prime Minister Shinzo Abe's efforts to urge people to invest more of their savings.

The IPO is the largest since Alibaba in September 2014 and Japan's biggest state asset sale since 1987. The privatization is part of a wave that includes Britain's Royal Mail Plc in 2013, Italy's Poste Italiane SpA last month and potentially China's postal savings bank next year.

The offering put 11 per cent of each company in private hands. The government plans to eventually sell all of the bank and the insurer through additional offerings and retain a third of the parent. Some of the proceeds will be used to rebuild areas in the northeast that were damaged by the 2011 earthquake and tsunami.

Japan Post, whose origins date back to 1871, was the brainchild of Mr Abe's predecessor and mentor Junichiro Koizumi, who won an election 10 years ago after campaigning for the sale.