Japan Post: this year’s biggest IPO

Japan’s government has raised $12bn from the initial public offering (IPO) of Japan Post.

767_Japan-post-634

Will Japan Post deliver a shareholder culture?

Japan's government has raised $12bn from the initial public offering (IPO) of Japan Post, marking the biggest flotation in global markets since Alibaba in September 2014 and Japan's biggest privatisation since 1987. The holding company of Japan Post jumped by 26% on its first day, Wednesday 4 November.

Two financial units are also being sold off. Japan Post Bank rose by 15% andthe insurance division soared by 56%. This week's initial public offeringhas put 11% of each company in private hands. The plan is to sell all of the bank and insurer, and retain a third of the parent. Japan Post is a national institution and behemoth with around 24,000 branches, more than all of the coutry's banks combined.

What the commentators said

That's the view that Prime Minister Shinzo Abe takes, and it's "remarkable how little resistance" he has faced from his colleagues, according to Jesper Koll of Wisdom Tree Investments. Ten years ago, Prime Minister Koizumi's attempt to get it past his party foundered. "Japan's old guard is dying away."

The hope is to "build a shareholding culture", said Anthony Fensom on TheDiplomat.com. Only 11% of Japanese households' money is in stocks, compared to 34% in the US and 18% in Europe. The IPO bodes well. Strong demand for the group's healthy yield of around 3% ensured a good start.

Citizens benefiting more from stocks is another element of Abenomics, the government's programme for ending stagnation. Meanwhile, money printing has weakened the yen, ensuring record profits for Japan's exporters. Throw in corporation tax cuts and still-reasonable valuations, and there is scope for the Japanese market to return a total of 10% over the next year, reckonedJohn Vail of Nikko.

Recommended

Get set for another debt binge as real interest rates fall
UK Economy

Get set for another debt binge as real interest rates fall

Despite the fuss about rising interest rates, they’re falling in real terms. That will blow up a wild bubble, says Matthew Lynn.
15 May 2022
Interest-rate rises mean more pain for stocks
Stockmarkets

Interest-rate rises mean more pain for stocks

Interest rates are rising around the world as central banks try to get inflation under control. That’s hitting stockmarkets – and there is more pain t…
13 May 2022
The return of the Marcos dynasty to the Philippines
Emerging markets

The return of the Marcos dynasty to the Philippines

The Philippines has elected Bongbong Marcos as president, three decades after his family was ousted from power in a popular revolution. What does that…
12 May 2022
Why Elon Musk's Twitter takeover could mark the end of the reign of the CEO
Stockmarkets

Why Elon Musk's Twitter takeover could mark the end of the reign of the CEO

The overlords of the corporate world have had their day, says Matthew Lynn. Long live the Technokings!
8 May 2022

Most Popular

Get set for another debt binge as real interest rates fall
UK Economy

Get set for another debt binge as real interest rates fall

Despite the fuss about rising interest rates, they’re falling in real terms. That will blow up a wild bubble, says Matthew Lynn.
15 May 2022
High inflation will fade – here’s why
Inflation

High inflation will fade – here’s why

Many people expect high inflation to persist for a long time. But that might not be true, says Max King. Inflation may fall faster than expected – and…
13 May 2022
What the Ukraine crisis might mean for ESG investing
Advertisement Feature

What the Ukraine crisis might mean for ESG investing

The Ukraine crisis has brought many of the issues around ESG investing into sharper focus. Where does the sector go from here?
3 May 2022