Shanghai Daily: Business - shanghaidaily.com
JAPAN'S biggest initial public offering of the year opened today with shares of Sony Corp's financial unit opening 5 percent above their premarket price. Sony Financial Holdings Inc raised an estimated 348 billion yen, or nearly US$2.97 billion, in selling shares on the Tokyo Stock Exchange. The stock was fetching 421,000 yen in early Tokyo trading, compared with an IPO price of 400,000 yen. The IPO is the biggest in Japan since Aozora Bank Ltd's 379.97 billion yen listing in November. Sony Corp has long planned an IPO for the unit. Sony Financial Holdings operates Sony Bank as well as life and other insurance companies. It accounted for 9 percent of Sony's group revenue in the fiscal year ended March. The wholly owned subsidiary of the Tokyo-based electronics and entertainment giant offered 75,000 new shares, while Sony will sell 795,000 of its 2.10 million Sony Financial shares to the public, including an additional 70,000 shares as an option to meet demand. Despite lingering worries about the subprime mortgage crisis in the US, which roiled global markets in August, analysts say the price could keep rising. "It's possible that shares of Sony Financial will rise to 500,000 yen in the near term if individual investors switch to aggressive buying as market sentiment improves," says Mitsushige Akino, general manager at Ichiyoshi Asset Management. Sony Financial has said it plans to use the money from the offering for the establishment of an annuity business joint venture with Aegon International N.V., and the remainder for a computer system at its three subsidiaries. For the fiscal year ending in March 2008, Sony Financial forecasts a net profit of 15 billion yen on 804 billion yen sales.