According to The Asahi Shimbun today, share prices of three Japan Post Group companies surged on the Tokyo Stock Exchange on 4 Nov in the nation’s biggest initial public offering in decades.
The market capitalization calculated on the first trading price for the three companies was about 15.4 trillion yen (US$128 billion), approaching the 25 trillion yen of NTT Corp. in 1987, Japan’s largest IPO.
The three companies that debuted on 4 Nov were Japan Post Holdings Co. and two of its subsidiaries, Japan Post Bank Co. and Japan Post Insurance Co.
“Our group has entered a new age today,” Taizo Nishimuro, president and CEO of Japan Post Holdings, said at a ceremony marking the start of trading for the three companies. “We will raise our corporate value in order to respond to the expectations of shareholders.”
Japan Post Holdings first traded at 1,631 yen, compared with its IPO price of 1,400 yen. Japan Post Bank’s starting price was 1,680 yen, while its IPO value was 1,450 yen. Japan Post Insurance had an IPO price of 2,200 yen but first traded at 2,929 yen.
Both Japan Post Holdings and Japan Post Bank recorded their first trading prices about 30 minutes after the TSE opened. However, it took more than an hour for Japan Post Insurance to achieve its first trading price, primarily because of its smaller number of shares available for trading. Still, the share price for Japan Post Insurance subsequently went as high as 3,350 yen.
Interest among general investors was high for the stocks of the three companies, reflecting the currently low interest rates for most financial instruments. Some brokerages received as much as five times the number of requests for shares as they were underwriting.
The central government plans to gradually reduce its stake in Japan Post Holdings to about one-third of the total. About 4 trillion yen of the funds raised through the public offerings will help fund reconstruction efforts in the Tohoku region, which was devastated by the March 2011 Great East Japan Earthquake and tsunami.
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