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Citi In Japan

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Sep 10 2007 12:00am EDT

Citi in Japan

An IPO "is the first sale of stock by a private company to the public". If you already have shares outstanding, then an offer of further shares is not an IPO. So Citigroup, pace the WSJ on Friday, has not really filed for an IPO in Japan: it's just seeking a listing there, which is a much smaller deal.

A Japanese listing does make sense for Citi, now that Mrs Watanabe is getting burned by her carry-trade plays. Japanese retail is a formidable source of liquidity, and it clearly has a substantial risk appetite. As a result, it's inevitable that sooner or later Japanese household savings will make their way into the stock market, rather than floating around as they do at present mainly in the bond and FX markets. As a truly global company with a strong presence in Japan (and, now, a full domestic banking license to boot), Citi is likely to be on any Japanese investor's shortlist of stocks to buy.

Besides, Chuck Prince is really good at looking contrite when he screws up.

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