Market expectations are running high for the imminent listing of the Japan Post group companies on the Tokyo Stock Exchange, which marks the beginning of the final phase of postal privatization started in 2005. But despite the hype over the initial public offering of Japan Post Holdings Co. and its two financial units, the long-term business prospects for the former state-run postal services are far from clear, due partly to the political twists in the privatization scheme.

Currently, the government wholly owns all shares of Japan Post Holdings, which in turn holds 100 percent of Japan Post Bank Co., Japan Post Insurance Co. and Japan Post Co. On Nov. 4, 11 percent of the shares in the holding company, Japan Post Bank and Japan Post Insurance will go on sale. The government plans to sell the shares in Japan Post Holdings in several batches until its stake falls to around a third of the total, while Japan Post Holdings will sell its shares in the two financial units and reduce its ownership to about 50 percent. Japan Post, the mail and parcel delivery service, will not go public. The shares in Japan Post Holdings, Japan Post Bank and Japan Post Insurance will be offered at ¥1,400, ¥1,450 and ¥2,200 per share, respectively. The total market capitalization of the three firms will reach ¥13.56 trillion, the biggest since NTT Corp.'s ¥24.96 trillion at its debut price when it went public in 1987.

The Japan Post group boasts a network of 24,000 post offices nationwide, with the combined assets of the group firms reaching ¥300 trillion. Japan Post Bank, operator of the former yucho postal savings system, is the nation's largest financial institution, with outstanding deposits of ¥177 trillion at the end of March topping those of any of the mega-banks.