JAL shares climb on return to market

Japan Airlines rose as much as 3 per cent on its return to trading in Tokyo following a 663 billion yen (HK$65.34 billion) initial public offering, making it Asia's third-biggest carrier by market value.

The company climbed as high as 3,905 yen from an offer price of 3,790 yen. It was at 3,830 yen at the close of trade yesterday.

The benchmark Nikkei-225 Index rose 1.4 per cent. The Tokyo-based carrier has a market value of US$8.77 billion.

The offering was priced at the top of the marketing range, which might limit gains, said Minoru Matsuno, the president of Value Search Asset Management, an investment advisory firm.

JAL returns to the stock exchange following a trip through bankruptcy and a turnaround that included shedding more than a third of workers, cancelling routes and retiring older planes.

"We should see the price rise gradually in the short-term," said Matsuno. "Overall, the fact that it rose at the start of trading is a plus."

JAL might climb to 5,420 yen, 43 per cent above its issue price, CLSA analysts Paul Wan and Yuki Haraguchi said in a note. They began covering the stock with a buy recommendation.