Home / Top Story / Japan Post companies net $11.9B in year's biggest IPO

Japan Post companies net $11.9B in year's biggest IPO


The Associated Press

Taizo Nishimuro, president of Japan Post Holdings, rings the bell during a ceremony at the Tokyo Stock Exchange in Tokyo Wednesday, Nov. 4, 2015. Shares of Japan Post jumped nearly 17 percent in the first day of trading after the company and its banking and insurance units raised a combined 1.44 trillion yen ($11.9 billion) in the world’s biggest initial public offering of stock this year. (Kyodo News via AP) JAPAN OUT, MANDATORY CREDIT

Associated Press

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By ELAINE KURTENBACH, AP Business Writer

TOKYO (AP) — Shares of Japan Post jumped nearly 17 percent Wednesday in the first day of trading after the company and its banking and insurance units raised a combined 1.44 trillion yen ($11.9 billion) in the world’s biggest initial public offering of stock this year.

The long awaited sale of shares in the state-owned company is the biggest since Chinese e-commerce giant Alibaba Group Holdings raised $25 billion in its IPO in September 2014.

The Japan Post sale is meant to tease out some of the more than $14 trillion that Japanese have squirreled away in savings accounts. Some IPO funds will help pay for rebuilding from the 2011 tsunami disaster.

Japan Post Bank shares surged 15.4 percent and Japan Post Insurance shares soared 38.2 percent.

The IPO comes more than a decade after Japan began privatizing its postal system and the postal banks that are the backbone of the country’s massive household savings pool.

Japanese have strong trust in their more than 140-year-old postal system, and shares in all three companies were in high demand and sold at the top end of the indicative price range.

The government sold the national telephone company, Nippon Telegraph and Telephone Corp., or NTT, in 1986, for $13.6 billion. The $18.4 billion IPO of NTT Mobile Communications Network in 1998 was the country’s largest IPO ever.

Japan Post has 24,000 outlets across the country and remains profitable, but its business is shrinking as the population ages and declines. Its banks and insurance companies face the same challenge.

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