Japan Post Shares Surging In 2015’s Biggest IPO

Japan Post Holdings Co. and its banking and insurance units soared on their debut in Tokyo this morning as trading began on the group’s $12 billion initial public offering. The IPO is the largest since Alibaba Group Holding Ltd in September 2014 and Japan’s biggest state asset sale since 1987.

Shares of the holding company surged as much as 17 percent and were trading 16 percent higher at ¥1,618 as of 9:46 a.m. in Tokyo. The bank climbed 14 percent to ¥1,659. However the insurance unit of the three pronged IPO skyrocketed to a eye watering 43 percent above its opening price. At the time of writing the Japan Post Insurance shares last traded at ¥2,994, 36 percent above the IPO price of ¥2,200.

Japan’s government has accumulated ¥1.44 trillion ($12 billion) from the IPO, which was vastly oversubscribed within days of going on sale last month. Almost 80 percent 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 initial offering has put 11 percent of each company in private hands. The Japanese government plans to ultimately 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. For many though that help although welcome, will arrive far too late.

Although the privatization of Japan Post comes to the market during the time of Abenomics, the idea for the public offering is widely recognized as the brainchild of Abe’s predecessor and mentor, Junichiro Koizumi, who won an election 10 years ago after campaigning for the sale.

 

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