• Selling is mostly long-onlys, buying is by hedge funds: Leske
  • Japan's government raised 1.44 trillion yen in the IPOs

Japan Post Holdings Co. and its banking unit rallied above their initial public offering prices before the world’s biggest IPO of 2015 officially starts trading next week.

Japan Post Holdings traded at 1,470 yen at 10:46 a.m. Tokyo time, according to Tom Leske, a sales trader at Churchill Capital Ltd. in Singapore. That’s about 5 percent higher than the 1,400 yen price set by the government on Monday, which was at the top of a marketed range. Japan Post Bank Co. traded at 1,540 yen, compared with its official price of 1,450 yen. Churchill hasn’t traded shares in the insurance unit, with bids at 2,360 yen and offers at 2,500 yen, Leske said.

Investor appetite for the three-pronged IPO meant Japan’s government was able to raise its maximum target of 1.44 trillion yen ($11.9 billion) in its biggest state asset sale since Nippon Telegraph & Telephone Corp. in 1987. The gray-market selling is dominated by long-only investors, while buyers are mostly hedge funds, Leske said. The trio will start trading on Tokyo’s exchange on Nov. 4.

Investor orders for shares in the three companies exceeded the number being offered after the first two days of bookbuilding, people with knowledge of the matter said earlier this month.

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