Japan Post Units Bid Higher Before Debut in Sign of Demand

  • Bank shares bid 6.9% higher than IPO price, ReOrient Says
  • Holding company to price next week, all three to list Nov. 4

Investors offered to buy shares in Japan Post Holdings Co.’s banking and insurance units for more than their initial public offering prices, a sign of appetite for the nation’s biggest privatization in almost three decades.

Buyers were willing to pay 2,350 yen a share for Japan Post Insurance Co. as of 3 p.m. in Tokyo in the so-called gray market, according to ReOrient Group Ltd. That was 6.8 percent above the IPO price of 2,200 yen. Japan Post Bank Co. was bid at 1,550 yen, compared with its official price of 1,450 yen. Churchill Capital Ltd. said the bank was bid at 1,510 yen while investors offered to buy the insurer for 2,290 yen. Both brokerages said no trades were made as nobody agreed to sell the shares.

“It is decent demand,” said Tom Leske, a sales trader at Churchill Capital in Singapore. “Selling interest has been much slower while the bids continue to creep higher.”

The government will raise 743 billion yen ($6.2 billion) from the sales of the units after prices for the bank and insurer were set at the top of their marketed ranges on Monday. Investor orders exceeded the amount of stock on offer after only two days, people familiar told Bloomberg last week. Prime Minister Shinzo Abe’s government is seeking to raise as much as 1.4 trillion yen selling Japan Post, the world’s largest IPO this year, in a three-pronged offering.

Once IPOs have been priced, some brokerages offer to trade the shares before they list in what is known as the gray market. The price for the holding company will be set on Oct. 26 and all three stocks will start trading on Nov. 4.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE