Nomura Holdings Inc., Japan’s No. 1 equity underwriter, expects initial public offerings in the country to reach the highest in six years as Prime Minister Shinzo Abe’s stimulus pledge boosts investor confidence.
About 60 Japanese companies will probably announce debut share sales in 2013, Masaharu Kambe, who heads Nomura’s IPO department in Japan, said in an interview. That would be a 25 percent increase from last year and the most IPOs in the country since 121 listings in 2007, according to Nomura data.
Abe today said the government will spend 10.3 trillion yen ($116 billion) to reverse Japan’s recession, his first major policy initiative to end deflation and spur growth since taking office last month. The Nikkei 225 Stock Average has risen about 10 percent since his Liberal Democratic Party won the election, improving the outlook for investment banking, Kambe said.
“Sentiment on the stock market has turned around, and we can expect more fundraising and M&A following IPOs,” Kambe said yesterday. “The new government has shown a strong commitment to pull out of deflation, the yen’s appreciation is being corrected and companies are improving their profitability.”
Nomura was the No. 1 IPO underwriter last year in Japan, arranging 17 of the country’s 48 offerings, according to the brokerage. The bank aims to increase its market share this year, Kambe said, declining to give details on its target.
The value of Japanese IPOs rose more than four times to 736.5 billion yen in 2012 from a year earlier, helped by Japan Airlines Co.’s $8.3 billion offering, according to Nomura data.
Under Abe’s stimulus plan, the government seeks to spend around 3.8 trillion yen for disaster prevention and reconstruction, with 3.1 trillion yen directed to stimulating private investment and other measures, according to a statement released today by the Cabinet Office. Extra spending will increase gross domestic product by about 2 percentage points and create about 600,000 jobs, the government said.
The prime minister has also called for more aggressive monetary stimulus to defeat deflation, helping the yen weaken against the dollar to the lowest level since June 2010, bolstering earnings prospects for exporters.
Shares of Nomura fell 0.6 percent to 490 yen at 1 p.m. in Tokyo. The Nikkei climbed 1.2 percent. Nomura more than doubled last year, compared with a 23 percent gain in the Nikkei.
Suntory Holdings Ltd. is planning an IPO for its non-alcoholic drinks and food unit this year that may raise between 300 billion yen and 500 billion yen, two people with direct knowledge of the matter said this week. The maker of Boss coffee and Orangina soda plans to hire Nomura as a lead underwriter for the offering, the people said.
The deal would help Nomura recover from mandates it lost last year including a lead role in Japan Air’s offering, following revelations that brokerage staff tipped traders on share sales it managed. Suntory would be Japan’s biggest IPO since the airline’s sale, data compiled by Bloomberg show.