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00:00You know the subject is a perfect timing for the government to privatize Jarrah Kyushu. Given the tourism boom that we do see in Japan how well do you think it's going to do today . Well good morning thank you for having me first. Well I think it's gonna do pretty well. I think around 10 percent up on the first day here. I think it's an interesting player infrastructure play associated with a nice dividend yield and some underlying growth story as well. I think that's what investors especially in Japan and also foreign investors like actually right. So infrastructure play here a dividend play as well . But you know we take a look at the earnings though for this train operator as a net loss of some 400 billion yen last fiscal year it loses money on the railways side. But you might as well call it a real estate company. But take a look at a chart receipts and to our viewers here. How does this compare with the other Japanese railway operators which are well underperforming the topics this year he compared obviously from the operational side lackluster performance. And obviously with the loss. I think what the market is really looking for is that the company sells also a growth story a story of diversifying away from the pure ticket sales into operation officer of the railways itself and I think that's reflective in the strong demand. It's the opening and obviously above says a government's incentivizing initial share holders as well by underpricing the deal after they lost a lot of money. The reason the wave of privatizations in Japan for sure and just in terms of the government you know Shinzo Abe ise Administration agent trying to convince a lot of Japanese and elderly investors to actually put their money out of savings and put it into the stock market we saw that with Japan Post in 2015. But those shares itself haven't really done well since the first couple of days they stayed below their listing prices. Do you see the same fate for Jiro Kyushu. I don't see the same fate here I think it's decently priced in terms of its fundamentals. I think again we come back to that series of growth stories as it's a story of international expansion and it's actually a company which benefits from the maturing Japanese society in terms of still more people travelling more tourists coming from foreign countries but also more domestic tourists actually travelling to the island and in Japan itself. Yeah. You know when we were talking earlier Joseph about overseas tourism going to Japan and making use of Jiro Kyushu and all the lines really there. Where do you see most of this influx coming in from say come from China especially as come from Europe from the United States. ISE and Chinese visitors now they have plenty of cash so willing to spend they don't go necessarily to the big shopping malls no more but say go and explore the country. And I think that's exactly what the company really can benefit from and that's because respective growth can come from. Right. And in terms of that growth ridership within the country that's one thing. But also I understand that there's a strategy for Jihye Lee Kyushu that could see it going elsewhere outside of Japan . What are some countries that might be some good candidates here . Malaysia Indonesia Southeast Asia obviously all these countries. The company wants to buy build restaurants. It's already active in some countries say buy properties as well . Right tell me about an IPO X itself Josefa if you want to invest in Q Shery Ahn IPO is what's one tool that you guys have that we can look into. CV we look at IPO was really from an asset allocation play off a big pool of companies which trade within the first four years of trading this is when really to skew the return distribution of the good and the bad IPO was actually happen. So we have a few exchange traded funds tied to our indexes such as the First Trust as IPO fund. So first trust international IPO fund which really help you access sees positive effects of the going public effects on on the on the respective better performing appeals and spinoffs really and asset allocation play. Applying indexing to the IPO market if indexing works it works best in the IPO market. We have shown it .

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JR Kyushu Railway IPO Set to Raise $4B

Josef Schuster, founder of Ipox Schuster, discusses the Kyushu Railway debut in Tokyo and the outlook for the IPO market in Japan. He speaks to Bloomberg's Yvonne Man and Ramy Inocencio on "Bloomberg Daybreak: Asia." (Source: Bloomberg)

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