Japan Post's red-letter day delivers a value gap

JAPAN Post's 1.4 trillion yen (S$16.2 billion) red-letter day has delivered a value gap. Shares in the postal operator and its two finance arms soared as they made their stockmarket debuts on Nov 4. Household-name status, coupled with big yields and low valuations, helped Japan's biggest privatisation in decades fly. Yet the share moves also suggest investors are at best lukewarm about the non-financial businesses.

The selloff, years in the making, is a milestone for Prime Minister Shinzo Abe's government. Three sleepy giants are emerging into view: Japan's biggest life insurer, the country's largest bank by deposits, and their parent company - a post network with unmatched national reach which owns 89 per cent of the two financial groups. All should grow nimbler now.

It's also a win for broader equity ownership - assuming that Japanese retail investors will in time also buy shares in businesses without state backing or 3 per cent-plus dividend yields.