- 300 people gather in Nagoya to hear about $11.6 billion deal
- Recent stock market turmoil is a concern to some investors
Managers of Japan Post Group’s $11.6 billion initial public offering met with potential retail investors in Nagoya on Friday, the first in a series of gatherings to drum up interest in the country’s biggest privatization since 1987.
About 300 people packed a hotel conference room in the central Japanese city to find out how to buy the shares in the holding company and its banking and insurance units before they list on the Tokyo Stock Exchange on Nov. 4. Some had queued for hours.
The government is seeking to sell more than 70 percent of the offering to individuals, in line with Prime Minister Shinzo Abe’s goal of encouraging households to invest more of their savings. The IPO comes after Japanese stocks were battered by global market turbulence stemming from China, with the Nikkei 225 Stock Average declining about 13 percent since this year’s peak in June.
Representatives from brokerages Nomura Holdings Inc., Mitsubishi UFJ Morgan Stanley Securities Co., Okasan Securities Group Inc. and Tokai Tokyo Financial Holdings Inc. led the one-hour meeting in Nagoya. Investors watched video messages by Japan Post Holdings Co. President Taizo Nishimuro and the heads of the banking and insurance units.
Takuyuki Suzuki, 68, a company employee from Nagoya, said he plans to buy shares in the three firms even amid the equity-market gyrations.
“Japan Post has large-scale operations and will never go bankrupt,” he said. “But I’m concerned about the recent drop in the stock market, which has made me less keen than I was.”
Abe has been urging Japanese to stop hoarding money as he tries to end years of deflation. Households had 1,717 trillion yen ($14.4 trillion) in financial assets as of June, of which about 52 percent was in cash, Bank of Japan figures show. Only 5.9 percent was in stocks.
Nishimuro emphasized Japan Post’s scale in his video message. Japan Post Bank Co. President Masatsugu Nagato talked of the company’s strengths as a large-scale investor with about 200 trillion yen in assets.
About 60 firms are underwriting the sale of Japan Post Holdings and the two units, which is estimated to raise about 1.4 trillion yen, based on indicative prices.
Similar gatherings will be held in 11 other locations around Japan in the next two weeks. The IPO is set to be Japan’s biggest since NTT Docomo Inc. went public in 1998 and the largest sale of a government entity since Nippon Telegraph & Telephone Corp. in 1987.