Japan to sell US$12b of Japan Post Holdings, growth potential under scrutiny

Japan to sell US$12b of Japan Post Holdings, growth potential under scrutiny
Japan's government on Monday said it will sell US$12 billion worth of Japan Post Holdings Co Ltd stock in an announcement that fund managers gave a tepid reception, saying limited growth prospects is likely to dull demand from institutional investors.


FILE PHOTO: A woman walks past an advertisement board of Japan Post at its headquarters in Tokyo, Japan January 30, 2017. REUTERS/Kim Kyung-Hoon/File Photo
11 Sep 2017 08:05PM (Updated: 11 Sep 2017 09:05PM)

TOKYO: Japan's government on Monday (Sep 11) said it will sell US$12 billion worth of Japan Post Holdings Co Ltd stock in an announcement that fund managers gave a tepid reception, saying limited growth prospects is likely to dull demand from institutional investors.

The sale will be the first since the 2015 initial public offering (IPO) of the postal firm and its two units, Japan Post Bank Co Ltd and Japan Post Insurance Co Ltd . That sale also raised US$12 billion, earmarked for reconstruction of areas devastated by an earthquake and tsunami in 2011.

"The company lacks growth potential appeal," said Kazuo Okabe, general manager at Fukoku Capital Management. "I don't think there will be strong demand from actively managed funds."

Japan Post, with 24,000 post offices and 400,000 employees, has spent the internet age minimizing the impact of a drop in letter delivery. It has also had to adjust to a competitive parcel delivery market that is booming thanks to e-commerce, but where the former monopoly is a distant third by market share.

M&A MISSTEPS

The national postal service prepared for its transition to private ownership with an attempt to demonstrate growth potential through acquisitions, aiming to become a global logistics firm akin to DHL operator Deutsche Post AG .

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It bought Australian logistics firm Toll Holdings Ltd for AUS$6.5 billion (US$4.9 billion) but had to write down much of the acquisition. Talks to buy Nomura Real Estate Holdings Inc ended earlier this year after failing to agree terms.

"Japan Post cannot expect to realise strong growth on its own, it needs to pursue acquisitions. Management should not be timid about them even after the failure of the Toll deal," said a ruling-party lawmaker, who is influential over a firm still 80 per cent owned by the government. The lawmaker declined to be identified to speak candidly about the matter.

Japan Post's chief executive has said the firm can achieve growth through organic means alone.

OFFER SIZE

The latest sale, including extra shares to cover strong demand, would be equivalent to 22 per cent of Japan Post's outstanding stock, worth about 1.3 trillion yen (US$12.1 billion) based on Monday's closing share price of 1,321 yen. The IPO price was 1,400 yen.

The offer price will be set from Sep 25 to Sep 27.

Analysts said the pricing might be affected by the sheer size of the offering being difficult for the market to absorb. The offering is worth about 60 percent of total funds raised in Japan's equity market in 2016, Thomson Reuters data showed.

Japan Post also said on Monday it will separately buy back up to 100 billion yen worth of shares from the government.

DIVIDEND APPEAL

About 80 percent of IPO shares were offered domestically, of which 95 per cent were sold to retail investors.

Of particular appeal to retail investors is Japan Post's relatively high dividend yield, market participants said. The yield was 3.79 per cent at close of trade on Monday versus 1.8 percent for the benchmark average, Thomson Reuters data showed.

"Still, I think investors would rather choose Tokyo Electron Ltd , which has higher growth expectations," said Takato Tanikawa, fund manager at Bayview Asset Management, referring to a chip-making equipment maker whose yield is 3.2 percent.

"There are many other stocks with solid fundamentals and similar dividend yields," he said.

Goldman Sachs, Nomura Securities and Daiwa Securities are global coordinators for the offering.

Read more at http://www.channelnewsasia.com/news/business/japan-to-sell-us-12b-of-japan-post-holdings-growth-potential-9206370




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Parkway Life REIT purchases nursing home in Japan

Parkway Life REIT purchases nursing home in Japan

PLife REIT purchased Ocean View Shonan Arasaki for S$18.9 million from Oueikikaku Kabushiki Kaisha. This follows an earlier acquisition of Habitation Jyosui, announced on Nov 28 this year.

SINGAPORE: Parkway Life Real Estate Investment Trust (PLife REIT) has purchased a nursing home and care facility property in Japan, its second acquisition in the fourth quarter of 2014, it announced in a press release on Friday (Dec 19).

PLife REIT purchased Ocean View Shonan Arasaki for ¥1,700 million (S$18.9 million) from Oueikikaku Kabushiki Kaisha. This follows an earlier acquisition of Habitation Jyosui, announced on Nov 28 this year.

With the recent acquisition, PLife REIT's Japan portfolio will stand at approximately S$518 million, or about 33 per cent of total assets under management, the press release said.

The acquisition is expected to be completed by January 2015. It is also expected to generate a net property yield of 6.9 per cent, the press release added.

- CNA/dl

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Japan puts new weather satellite into space

Japan puts new weather satellite into space

Japan hopes the new satellite can improve the forecasting of typhoons and help with early warnings of volcano eruptions.

TOKYO: Japan put a new weather satellite into space Tuesday (Oct 7) in the hope it can improve the forecasting of typhoons and detect volcanic gas plumes.

The successful launch comes the day after a typhoon strafed Japan and just over a week after a volcano killed more than 60 people when it erupted without warning.

The Japanese-made H-2A rocket carrying the Himawari-8 weather satellite blasted into a blue sky at the Tanegashima Space Centre in southern Kagoshima prefecture at 2:16pm (1.16pm Singapore time).

The 17 billion yen (US$155 million) satellite separated successfully from the rocket and entered its designated orbit, sparking applause at the space centre, a Japan Aerospace Exploration Agency (JAXA) spokeswoman told AFP.

Japan's Meteorological Agency will use the satellite, alongside the Himawari-9, which is to be launched in 2016, for forecasting and to replace its ageing Himawari-6 and -7. The new satellite "can obtain a satellite image of a typhoon once every 2.5 minutes, against the current pace of once every 30 minutes," an official of the weather agency told AFP.

"Together with improvement in computer-aided analysis, we hope our forecasts of a typhoon's future course will be more accurate," he said. "As satellite images will become multi-colour from the current black and white, it will be easier to observe volcanic gas" which will be helpful for early warnings of a volcanic eruption, he added.

- AFP/xq


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Online banking thefts hit Japan firms

Online banking thefts hit Japan firms

[TOKYO] Hackers stole nearly US$2 million from the online bank accounts of Japanese businesses in April, a surge in theft that has prompted some banks to curtail online services and rethink compensation policies, executives and regulators say.

In April there were 50 cases of theft from online accounts held by Japanese businesses with nearly 200 million yen stolen, according to a person with knowledge of the industry-wide tally, which has not been made public. That was more than the entire previous year.

Japanese businesses reported 34 cases of online banking theft for the year ended March with a total of US$1.8 million stolen, according to data released by the Japanese Bankers Association.

Earlier this month, a senior official with Japan's Financial Services Agency told regional bank executives that regulators were concerned that online theft could cause a chain of small business failures and bankruptcies, according to participants who attended the closed-door meeting.

Mitsubishi UFJ Financial Group and Mizuho Financial Group said their corporate customers had been hit by online thefts. Top regional lenders such as Fukuoka Financial Group and Bank of Yokohama also said their clients had also experienced losses.

Corporate users of online banking in Japan tend to be small businesses and family-owned firms. In a typical theft, hackers trick owners into surrendering passwords or gain control of poorly protected computer systems to make transfers out of their accounts, industry officials and security experts said. "This has become a serious problem," Masaaki Tani, president of Fukuoka Financial Group, the largest regional bank, said earlier this month.

It was not clear why cases of such theft had increased so rapidly although bankers elsewhere have warned of a growing threat from hackers. "Cybersecurity attacks are becoming increasingly complex and more dangerous," JPMorgan Chase &; Co Chief Executive Jamie Dimon said in a letter to shareholders in April.

Japan's banks are divided on how to respond. Promising compensation might remove an incentive for businesses to tighten security, some executives say. At the same time, tightening security too much could kill the convenience of online banking.

In April, many regional banks suspended a service which allowed clients to transfer money on the spot to accounts that were not pre-registered. Chiba Bank reduced its online transfer limit to 10 million yen, from just under 100 million yen.

Until now, the question of whether to compensate businesses for online theft has been left to each bank. Most offer fewer protections than they do for individual accounts.

Resona Bank has said it will compensate business clients for Internet losses of up to 50 million yen when customers have taken appropriate security measures.

The lender is part of Resona Holdings, Japan's fourth-largest banking group by assets. Resona's pledge is part of a push to build its business, including lending, to small- and medium-sized businesses at a time when overall loan demand remains weak.- Reuters

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Japan national debt tops one quadrillion yen

Japan national debt tops one quadrillion yen

    POSTED: 09 Aug 2013 6:36 PM
 
Japan's eye-watering national debt has topped one quadrillion yen, official data showed Friday, a record figure that underlines Tokyo's struggle to curb its huge borrowing.

TOKYO: Japan's eye-watering national debt has topped one quadrillion yen, official data showed Friday, a record figure that underlines Tokyo's struggle to curb its huge borrowing.

The figure supplied by the finance ministry of 1.008 quadrillion yen by the end of June amounts to about $10.42 trillion at current exchange rates.

A quadrillion is one thousand trillion.

Tokyo has the dubious distinction of having, proportionately, the biggest debt pile among industrialised nations, more than twice the size of its economy.

The lion's share of that debt is from long- and short-term Japanese government bonds, as well as other borrowing.

The staggering figure, about 1.7 percent higher than the previous quarter, comes a day after Japan pledged to slash its budget and get spending under control.

Japan has not faced a public debt crisis like the kind seen across the debt-riddled eurozone, largely because most of its low-interest debt is held domestically rather than by international creditors.

But the International Monetary Fund and others have issued warnings about Tokyo's ever-increasing borrowing, after a series of sovereign credit rating downgrades in recent years.

This week the IMF called on Japan to adopt a "credible" fiscal plan to repair its books, including raising sales taxes to generate new revenue.

Prime Minister Shinzo Abe's government is mulling whether to go ahead with a series of sales tax rises that would double the rate to 10 percent by 2015, a key source of new income but one that some fear would stall his economy-boosting plan dubbed "Abenomics".

- AFP/xq

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