Japan Post firms make bumper debut after $12bn triple IPO

Japan Post Holdings and its two financial units burst out of the gate with gains of 16 to 33 per cent in their market debuts yesterday, after the government raised $12 billion from the triple 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 gave 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.”

Group parent company Japan Post Holdings was traded at 1,665 yen, 19 per cent higher than the initial public offering price of Y1,400. Japan Post Bank shares were at Y1,670, up 15 per cent from an IPO price of Y1,450 and Japan Post Insurance was at Y3,410, 55 per cent above its Y2,200 IPO price.

The government allocated about three quarters of the total offer to Japanese individual investors.

“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.

Japan Post firms, which now have a combined market value of more than Y16 trillion, 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. – (Reuters)