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August 15, 1988

NTT TRANCHES TO BE OFFERED AT EVER-RISING PRICES ?

By CBR Staff Writer

Having raised expectations that the small tranches of Nippon Telegraph & Telephone Corp being trickled out will be offered at ever-rising prices, the Japanese Finance Ministry is in something of a quandary over the next issue, expected later this year: the last one went at $19,200 a share (yes, well they don’t have quite the same perceptions of value in Tokyo as we do over here) last November, and the shares are now trading at a big discount, $17,600 or so according to the Wall Street Journal; Japan is effectively a corporate state, so it is in the Finance Ministry’s power to rally institutions to massage the market up immediately prior to the float – but is that a sensible thing to do when the Tokyo market is by all normal measures dangerously overbought and could well be teetering on the brink of a plunge that all the corporate strength of government, institutions and industry would be powerless to forestall? And just for the record, even at $17,600, NTT is still on a prospective multiple of 155 – and no, there’s no missing decimal point.

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