The triple listing of Japan Post, the Bank and the Insurer — Japan’s last great privatization (2015)

The end point of privatization, and what it left unfinished

The simultaneous listing of the three companies drew a line under the privatization that had been running since the Koizumi government. Taking a special company wholly owned by the state to market with a pure holding company still sitting over the two financial subsidiaries, and tying the proceeds to the national cause of funding reconstruction, can be read as an attempt to fold the demands of politics, public finance and the capital markets into a single scheme. That all three closed above their offer price on the first day shows that, at least at the point of sale, the tightrope was walked successfully.

Yet a listing is not a finish line; it is where the scoring as a private company begins. A structure in which most of the net profit comes from the two financial companies, a governance problem built into listing parent and subsidiaries together, the tension between a nationwide service obligation and the market’s demand for productivity — the issues raised at the time of listing would be asked again and again, in the weak share price that followed and in each decision about selling down the financial subsidiaries. By opening itself to the market, the group arguably placed itself where it would be permanently asked whether privatization had really been achieved.