Japan Post shares jump 20% after IPO

“There were investors who tried to buy the three companies at the same time and it tightened the supply-demand balance”, Kobayashi said. The fate of the Japan Post Group stock prices will likely affect the whole of the domestic stock market. “If they drop a lot, that could weigh on the whole market”.

The shares, which raised 1.4 trillion yen ($11.6 billion) for Japan’s government in its biggest privatisation since the 1980s, continued to gain during heavy mid-morning trade. Last month, the offerings were priced at the top of their proposed range. About half was in cash or bank deposits.

The news also bodes well for Prime Minister Shinzo Abe, who is counting on a successful listing to persuade Japanese investors to rotate more of their bank savings into stocks.

Investors have given a thumps up to the privatization of Japan Post Holdings and two of its financial units, as the firm is attempting to wade into unchartered territory using the licence the privatization process offers.

“It’s quite odd that Japan Post Insurance is trading above Dai-ichi or MS&AD valuations”, said Tatsushi Maeno, head of Japanese equities at Pinebridge Investments Japan Co.in Tokyo. “When we look back on this with impartial eyes, it’ll be obvious it was quite overbought”.

It was the biggest debut since Alibaba’s $25bn IPO past year.

Japan Post, in addition to offering mail delivery services, is also offering banking services, loans and insurance to customers. I just hope to get dividends. “And this is good news”, said Kingston, the Director of Asian Studies at the university.

Only 11 percent of the government’s equity in the three companies was sold.

Analysts said shareholder pressure would help force Japan Post to speed up its decision-making and control costs. The sale “will be a trigger to speed up the move from savings to investment and will help progress toward a virtuous cycle in the economy”.

Another contributing factor was increased efforts by financial corporations to market the stocks issued by Japan Post Holdings Co. and its two units, Japan Post Bank Co. and Japan Post Insurance Co., observers said.

The Dow Jones Industrial Average rose 0.50 percent, while the broad-based S&P 500 added on 0.27 percent and the Nasdaq Composite Index gained 0.39 percent.

Exporters advanced. Advantest Corp (TYO: 6857) increased 1.8%, and Honda Motor Co. “The downside is its lack of cost-consciousness”, said Yasuhide Yajima, the chief economist of NLI Research Institute.

Japan Post remains profitable but only thanks to fees paid by its banking and insurance units for operating inside post offices.