Japan Post IPOs priced at top of range as government mines savings mountain
In Japan’s biggest privatization in three decades, the national postal and savings firm priced the third of a trio of share sales at the top of its range as mom-and-pop investors scrambled for a piece of one of the most trusted names in the country.
Japan Post Holdings Co (6178.T) on Monday followed the pattern set by its banking and insurance arms, setting the maximum available price after book-building targeted squarely at retail investors across the nation. The sale of just over 10 percent of the firm at 1,400 yen per share will raise $5.7 billion.
Privatizing Japan Post is an acid test for Prime Minister Shinzo Abe that goes beyond seeking a total of 1.4 trillion yen ($11.6 billion) in proceeds to help fund reconstruction after 2011’s massive earthquake and tsunami. The IPOs are key to Abe’s plans to coax the nation’s savers to shift money into shares, creating a “virtuous economic cycle”, according to government spokesman Yoshihide Suga on Monday.
“There are many retail investors who are attracted to Japan Post’s relatively high dividend yield,” said a fund manager at a Japanese asset management firm, speaking on condition of anonymity. “I don’t hear much demand from overseas investors, but demand from domestic investors looks solid.”
Japan Post hasn’t disclosed subscription levels for the three offers, referring only to “significant demand”. But along with 11 lead underwriters, some 50 smaller brokerages across the country have been hired to sell shares, many complaining their allocations were too small to meet demand from investors looking for safe, if unspectacular, alternatives to utilities.
With only around 10 percent of each firm now on offer, Japan also hopes to extend strong retail interest into tranches to be sold off in future, eyeing about $33 billion in reconstruction funds. Read more