Japan Post share sale an instructive sign for ECM
Don’t expect a flood of IPOs, but there are still placements across Asia Pacific.
News that Japan Post Holdings plans to raise around $9.5 billion equivalent from the sale of shares in its banking unit should be welcomed, not only in Japan but regionally.
It is a sign that, despite continuing global volatility, equity capital markets deals will get away.
We are not yet seeing many IPOs, for the very good reason that there is surely going to be a better time for any private company to face markets for the first time. Instead, a pattern is beginning to emerge: sell-downs by already listed businesses, often linked to specific transactions for which funding can’t wait.
Japan Post’s circumstances are very specific. The group was listed in 2015 in a concurrent three-sided IPO of Japan Post Holdings, Japan Post Bank and Japan Post Insurance, raising nearly $12 billion in the world’s largest IPO that year.
Around Asia Pacific, it is block trades and other secondary structures that are keeping ECM teams busy
Much like the UK, Japan’s post office had adopted as early as the 1870s a model in which savers could deposit funds at local branches, effectively making it the biggest retail bank in the country by savings and deposits as of 2013.