TOKYO • Japan Post Holdings and its two financial units burst out of the gate with gains of 16 per cent to 33 per cent on their debut yesterday, after the government raised US$12 billion (S$16.8 billion) from the triple initial public offering (IPO) in Japan's biggest privatisation since 1987.
The listing of the national postal and savings giant is a key step in Prime Minister Shinzo Abe's ambitions to kick-start Japan's sluggish economy by encouraging risk-averse households to invest or spend more of their low-yielding bank deposits.
"It is significant that this IPO has brought in funds from individual investors and given them some profits," Monex Securities chief strategist Takashi Hiroki said.
"There are many people out there who bought shares for the first time in their life in this IPO... If even some of these people who made profits in Japan Post shares buy other shares, that would be a big step."
SIGNIFICANT PUBLIC OFFERING
It is significant that this IPO has brought in funds from individual investors and given them some profits... There are many people out there who bought shares for the first time in their life in this IPO.
MONEX SECURITIES CHIEF STRATEGIST TAKASHI HIROKI, on the triple IPO, adding: "If even some of these people who made profits in Japan Post shares buy other shares, that would be a big step."
As of 6.30pm Singapore time yesterday, Japan Post Holdings was at 1,760 yen, 25 per cent higher than the IPO price of 1,400 yen. Japan Post Bank shares were at 1,671 yen, up 15 per cent from an IPO price of 1,450 yen and Japan Post Insurance was at 3,430 yen, 55 per cent above its IPO price of 2,200 yen.
The government allocated about three-quarters of the total offer to individual investors.
The solid performance helped to boost the entire Japanese market, with the Nikkei rising 2.2 per cent, although analysts said the shares were priced cheaply so a strong debut was expected.
"The pricing seems as if the government recognises that Japan Post's growth prospects are limited in the near future.
"We need more time to see their growth potential," Rakuten Securities senior market analyst Masayuki Doshida said.
The Japan Post firms, which now have a combined market value of more than 16 trillion yen (S$185 billion), have by far the most extensive retail network through 24,000 post offices around the country.
Still, with postal delivery services declining due to the rise of electronic communications, the future of the Japan Post firms could depend on the success of the two financial subsidiaries, Japan Post Bank and Japan Post Insurance.
Japan Post Bank president Masatsugu Nagato, in an interview before yesterday's market debut, said his bank would look at increasing investment in assets such as high-yield bonds to boost returns.
In the past, Japan Post invested a large part of its funds in government bonds and safe but low-yielding assets.
The government eventually aims to raise about 4 trillion yen through additional stake sales over the next several years to fund the reconstruction of areas hit by the 2011 earthquake and tsunami.
About 10 per cent of each Japan Post company's shares were sold to the public, raising about 1.4 trillion yen, in the largest privatisation of a state-owned firm since that of Nippon Telegraph and Telephone Corp in 1987.
Mr Heizo Takenaka, a main driver of Japan Post's privatisation, said the IPO was not an end in itself.
"What is important is to instill a private management culture," he said.
REUTERS, AGENCE FRANCE-PRESSE