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Business

Shares in Japan Post soar on market debut

Japan Post, a massive formerly state-owned conglomerate, went public on the Tokyo Stock Exchange Wednesday, raising $11.5 billion in an initial public offering that was this year's biggest.

After the opening bell in Tokyo, investors scrambled to snatch up shares in the three companies affiliated with

Japan Post

, including the group's holding, insurance and banking units. It is the biggest offering globally since Chinese e-commerce giant Alibaba's $25 billion IPO.

Amid the positive response from traders, shares in all three firms were quickly fetching more than their offering prices. But it was Japan Post Insurance that performed the best - its shares were trading at 2,929 yen ($24.18, 22.11 euros), up from an offering price of 2,200 yen.

The group is one of the largest financial institutions in the world with a banking arm, called Japan Post Bank, that held $1.5 trillion (179 trillion yen) in deposits at the end of last year.

The sell-off was likely to be one of Japan's last major privatizations. The company was founded in 1871 in a wave of modernization, in which Tokyo adopted Western business practices. Today, it operates 24,000 post offices, 14 hospitals and dozens of hotels across the island nation.

A shift away from traditional mail services has dented the company's bottom line. It expects a net loss of 26 billion yen by the end of the current fiscal year.

But on Monday, the hotly anticipated market debut sent Japan's benchmark Nikkei 225 index soaring. By the end of the day, it had advanced 2.4 percent.

Japan has said that the money it raised in the IPO would partially be spent upgrading infrastructure in northeastern regions that were damaged by natural disasters in March 2011.

cjc/ng (dpa, AFP)

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