Shinsei IPO sends positive signal
Proof that banking reform in Japan is becoming a reality came yesterday with the flotation of Shinsei, which ended its first day of trading in Tokyo at a 58 per cent premium to its issue price.
There were no sellers of the rescued bank's shares for the entire morning trading session. The shares eventually closed at Y827 after an issue price of Y525, taking the bank's market capitalisation through the trillion yen mark to Y1,124bn.
The listing was the largest by a Japanese company since NTT DoCoMo's $18bn listing in 1998 and the debut performance far outmatched last year's two biggest share launches, when Seiko Epson debuted at a premium of 42 per cent and NEC Electronics rose 27 per cent.
Shinsei is the first bank in the country's history to have been relisted on an international capital market after collapsing and being revived by new owners.
Previously called Long Term Credit Bank, it was nationalised in 1998 before being sold to a consortium of international investors led by Ripplewood, the US private equity company.
Shinsei reported net profit for the six months to September of Y34bn, a rise of 29 per cent from the same period previously. The success of the debut shows that investors will support profitable banks and provides evidence that foreign investors can enter and exit one of the world's most bureaucratic economies.
This will help reinforce the growing impression that after 13 years of struggling, Japan's largest banks - Mizuho, SMFG, MTFG and UFJ - are now taking the necessary action to stimulate a sustained revival. ....
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