Market News & Analysis

Japan Post shares jump 20% after IPO

Japan Post Holdings' shares jumped 20 per cent after the company said it raised 1.44 trillion yen (£7.7 billion) in the world's biggest initial public offering of stock (IPO) this year.

The listing – which will also included its bank and insurance units – marks Japan's biggest privatisation in nearly three decades.

Shares of Japan Post Bank closed up 15 per cent while Japan Post Insurance skyrocketed 56 per cent.

The listing is part of Prime Minister Shinzo Abe's plans to boost the flagging economy by encouraging consumers to invest in the stock market.

Towards a virtuous cycle in the economy

"The IPO is an important step in privatisation and the shares in the three group companies are an important asset of the Japanese people," said chief cabinet secretary Yoshihide Suga. The sale "will be a trigger to speed up the move from savings to investment and will help progress toward a virtuous cycle in the economy".

The government plans to raise a total of four trillion yen in additional asset sales in the coming years and said the funds will be used to help reconstruct areas hit by the 2011 earthquake and tsunami.

Japan Post Holdings has received the go-ahead from the Tokyo Stock Exchange to go public in November.

Income expected to decline

The postal group said it expects net income to decline 23 per cent to 370 billion yen in the year ending on March 31st.

The bank unit forecasts annual net profit to fall 13 per cent while the insurance unit said net income is likely to gain three per cent.

Japan Post employs more than 200,000 staff in 24,000 offices and branches nationwide. Its banking unit has about 178 trillion yen in deposits.

The government has privatised several state-owned companies in recent years, including a state railway, telephone company and cigarette maker.

From time to time, GAIN Capital Limited’s (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.