Monday, October 26, 2015

Japan Post raises $11.6bn in IPO; UK manufacturing faces demand slump; Apple, Microsoft lead in consumer 'delight'

1 Japan Post raises $11.6bn in IPO (Khaleej Times) Japan's government raised the maximum 1.44 trillion yen ($11.9 billion) sought in the privatisation of the nation's postal service and its banking and insurance units. Shares of Japan Post Holdings were priced at 1,400 yen, the top end of a marketed range. Its two financial units were also offered at the highest price a week ago.

The three-pronged IPO is the world's biggest since Alibaba Group Holding in September 2014, as Prime Minister Shinzo Abe fulfills a plan first drawn up by his mentor and predecessor Junichiro Koizumi 10 years ago. Almost 80 per cent of the shares are being sold to individuals as part of Abe's goal of getting households to invest more of their savings.

The brokerages that worked on the IPO will receive about 24.5 billion yen in fees, according to Bloomberg calculations. Nomura Holdings, Mitsubishi UFJ Morgan Stanley Securities Co, Goldman Sachs Group and JPMorgan Chase & Co were global coordinators of the sale.

Demand for the shares has been strong as Japan's stock market rebounds from a slump stemming from China's equity selloff in August. The Nikkei 225 Stock Average has gained 3.5 per cent since the sale plans were announced on September 10.

About 11 per cent of the three companies will be sold in the IPO, which is Japan's biggest since NTT Docomo Inc. in 1998 and the country's largest privatisation since Nippon Telegraph & Telephone Corp in 1987. Some of the proceeds will be used to rebuild areas in the northeast that were damaged by the 2011 earthquake and tsunami.

Italy is also floating its postal service, raising about $3.4 billion in the IPO of Poste Italiane SpA after fixing the price at ?6.75 a share last week. Most of Japan Post's profit comes from its two financial units, which the government plans to eventually divest entirely. The holding company is shifting the focus of the postal service to logistics and package delivery as the volume of letters and postcards declines due to the advent of electronic communication and the shrinking population.      

2 UK manufacturing faces demand slump (Katie Allen in The Guardian) British manufacturers are suffering from waning demand from home and abroad, according to the latest business survey highlighting the impact of sputtering global growth and a strong pound.

The survey by the business group CBI suggests order books have deteriorated at the fastest pace for three years. Facing a gloomier outlook, manufacturers have scaled back hiring in recent months and are looking to cut spending on training and innovation.

The survey echoes other recent economic indicators that suggest demand is being depressed by a downturn in China and the wider global economy, as well as the prospect of more UK spending cuts being announced in the government’s review next month.

The CBI survey, which assesses the sector based on a balance of responses from individual firms, found that 22% of businesses reported an increase in total new order books. Thirty per cent reported a decrease in the three months to October. That gave a balance of -8%, the lowest since October 2012.

3 Apple, Microsoft lead in consumer ‘delight’ (Benny Evangelista in San Francisco Chronicle) Apple is the top electronics brand that “delights” consumers, but Microsoft is a strong No. 2 on the strength of its new tablets, phones and fitness brands, according to a report from research firm Argus Insights.

“Apple has created a walled garden with its all-star mix of hardware and software,” Argus CEO John Feland said. “But over the past year we have watched Microsoft’s success in devices poking holes in Apple's walls with their tablet and wearables offerings.”

The firm sifted through about 942,000 online consumer reviews and social media conversations from January to September to generate its report, “Battle of the Brands — Making Sense of the Mad Dash for Mindshare.” The report examined the buzz generated by five big consumer brands: Apple, Microsoft, Google, Amazon and Samsung.

 “Unlike Google and Amazon, which offer inexpensive hardware offerings meant to entice more consumers to visit their gardens more often, Microsoft has focused on crafting new experiences built on solid hardware that is delighting consumers,” Feland said. “Samsung, without a strong content play, is just leasing space in the gardens of other brands.”

Amazon and Samsung were battling for third place in the delight rankings, while Google ranked last, the report said. Argus found that consumers called Google’s Nexus phones only “good enough,” which was “a bar being raised by Microsoft and Apple.”

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