|Bid||4.3800 x 4000|
|Ask||4.4600 x 3000|
|Day's Range||4.4050 - 4.4400|
|52 Week Range||3.0500 - 5.0500|
|Beta (3Y Monthly)||1.13|
|PE Ratio (TTM)||16.01|
|Forward Dividend & Yield||0.06 (1.26%)|
|1y Target Est||3.87|
(Bloomberg) -- Nomura Holdings Inc.’s investors are cheering the firm’s early progress in cutting $1 billion of costs at its global trading and investment banking business. Reviving the domestic retail operation may prove more of a challenge.Japan’s biggest brokerage has jumped 40% from this year’s low in early June, buoyed by a return to profit at its wholesale arm, where Chief Executive Officer Koji Nagai has been focusing the cutbacks. A revival in fixed income -- which made up 25% of net revenue last quarter -- helped shareholders shrug off a sixth straight year-on-year decline in pretax income at its retail business.The wholesale rebound gives Nagai room to fix a consumer operation plagued by weak individual investor sentiment, an aging client base and intensifying competition with cheaper online rivals. That represents a reversal after retail for years made up for persistent losses abroad, particularly when costs swelled following the disastrous Lehman Brothers Holdings Inc. acquisition in 2008.Nomura’s latest earnings show “it’s doing well in areas it’s opted to focus on, including in the overseas wholesale business,” said Toshihiro Matsuo, an analyst at S&P Global Ratings in Tokyo. It will probably take more time to strengthen profitability in its operations serving individual investors at home, he added.When Nagai, 60, unveiled his turnaround plan in April, he pledged to scale back businesses such as emerging-markets trading and exit areas including U.S. high-yield bonds. Progress has been fast: the firm had achieved half of the targeted cost cuts by the end of July, Chief Financial Officer Takumi Kitamura said at the time.Still, though Nomura has turned in the best performance on the Nikkei 225 Stock Average since the earnings update, its valuation relative to global financial shares remains low after reaching a record discount earlier this year, according to data compiled by Bloomberg. It is trading at about 0.58 times book value, cheaper than Daiwa Securities Group Inc.’s 0.64.Shares of Nomura closed 2.5% lower on Wednesday.A Nomura spokesman declined to comment.As part of his retail overhaul, Nagai is trying to woo younger customers by teaming up with Line Corp. -- Japan’s biggest mobile messaging operator. He wants to close branches and focus costly face-to-face services more on wealthier clients.Nagai has described Nomura’s own online broking services as “uncool,” and there’s debate over whether the latest effort, launched in August, will succeed.“Nomura needs to do something about the generational issue eroding its core customer base, but it doesn’t seem like the Line joint venture in its current setup can really do that,” said Michael Makdad, an analyst at Morningstar Inc. in Tokyo.The joint chiefs of Line Securities Corp. Yoshikazu Yonenaga and Noritaka Ochiai suggested in a recent interview that the venture may bring little direct benefit to Nomura, at least in the short term, other than returns on its investment in the company. “Ultimately it is up to users to decide” whether to use Nomura’s services, co-CEO Ochiai said last week.What Bloomberg Intelligence SaysWholesale profit may rebound on a lower cost base and large exposure to recovering overseas bond trading income. Yet retail product sales may stagnate on a gloomy stock market outlook, driven by a U.S.-China trade war and global recession fears.\--Francis Chan, bank analystClick here to read the researchRegardless of whether they’re chasing customers online or in person, Nomura and its Japanese rivals all face another problem: the reluctance of households to invest more of their savings.“We need to see whether investors’ risk appetite is strong enough to support sufficient recurring income for Nomura,” said David Marshall, co-head of Asian bank research at CreditSights Inc.As for the global advisory and trading business, it’s still too early to say whether the rebound will last. Nomura remains reliant on fixed-income trading -- a tough area for securities firms worldwide. And with central banks now firmly back in easing mode, there is a risk that bond market activity will decline further.“Nomura’s profitability has picked up from its previously very weak levels, which is encouraging,” Marshall said. “But given the challenging outlook for global economies and financial markets it remains to be seen whether this can be sustained.”(Closes shares in the seventh paragraph)To contact the reporters on this story: Takashi Nakamichi in Tokyo at firstname.lastname@example.org;Takako Taniguchi in Tokyo at email@example.comTo contact the editors responsible for this story: Marcus Wright at firstname.lastname@example.org, Russell Ward, Candice ZachariahsFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Sign up for Next China, a weekly email on where the nation stands now and where it's going next.Nomura Holdings Inc. is on track to have more than 100 employees in its Chinese securities venture when it starts operations in December, people familiar with the matter said, as China opens up its $42 trillion financial industry to foreign competition.The new hires are part of Nomura’s plans to develop a wealth management and institutional brokerage business on the mainland, the people said, asking not to be identified because details of the plan aren’t public. The Tokyo-based company has received in-principle approval from Chinese regulators for four licenses, covering brokerage, proprietary trading, asset management and research, the people said.Chief Executive Officer Koji Nagai is looking to China as a key growth market as the firm struggles to return profits from other overseas businesses. Nomura, which is shrinking its European trading business, will first focus on wealth management on the mainland before expanding into other areas including wholesale securities operations, Nagai said in December.Its local venture, along with minority partner Shanghai-based Orient International (Holding) Co., plans to focus on clients with a minimum of 3 million yuan ($421,000) of investable assets, according to one of the people. It is considering a plan to build up in asset management in parallel with the wealth management buildup, the person added.JPMorgan Chase & Co. and UBS Group AG are among the other overseas firms to receive approval for majority control of local securities ventures following China’s 2017 decision to lift restrictions on the industry.Goldman Sachs Group Inc. has applied to boost its stake in its Chinese joint venture to 51% from 33%. Goldman Sachs Gao Hua Securities Co. had 103 employees as of Dec. 31, company filings show. UBS’s Beijing-based securities venture had 370.Read a QuickTake on China’s plans to open its financial industryAmong the new Nomura hires in China are Sun Dongqing and Li Qiang, formerly head of wealth management and head of institutional equity respectively at China International Capital Corp., the people said. Other senior hires include Gao Ting, ex-China chief strategist at UBS Securities Co., and Dong Lafa, formerly at Changjiang Securities Co., one person said.Lillian Liu, a Beijing-based spokeswoman at Nomura, declined to comment.The buildup in China contrasts with the cutbacks elsewhere in Nomura’s international operations, where the firm is shedding jobs in an effort to restore profits outside Japan. Nomura reported its first overseas profit in six quarters in the three months ended June 30, an early sign of progress in the restructuring program.Nomura was among Japanese financial firms that agreed to set up a 200 billion yen ($1.9 billion) fund with China Investment Corp. last October to help companies enhance trade between the nations. (Updates with Japan-China industrial fund in the last paragraph)To contact the reporter on this story: Cathy Chan in Hong Kong at email@example.comTo contact the editors responsible for this story: Candice Zachariahs at firstname.lastname@example.org, Marcus Wright, Russell WardFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Goldman (GS) might acquire a majority stake of 51% holding in its Chinese investment banking joint venture, Goldman Sachs Gao Hua Securities Co.
Nomura Holdings Inc will pay $26.5 million to settle U.S. Securities and Exchange Commission charges that it failed to properly supervise five former traders who lied to customers about mortgage bond prices. The accord relates to allegations that the traders misled customers about prices at which they bought bonds, understated the profit Nomura stood to make and sometimes pretended they were still negotiating to buy bonds that Nomura had already purchased. Without admitting wrongdoing, Nomura agreed to pay $1.5 million in civil fines and make $25 million of restitution to customers who bought and sold commercial and residential mortgage-backed securities from roughly 2010 to 2014.
Foreign firms are set to benefit as China plans to end all ownership limits within its financial sector a year earlier than previously stated.
Japan's Nomura Holdings Inc won shareholder approval on Monday for the re-appointment of its chief executive officer, overcoming concerns about the leaking of market information and its first annual loss in a decade. CEO Koji Nagai kept his job despite opposition from influential proxy advisory firm Institutional Shareholder Services Inc, which had recommended shareholders vote against his re-appointment. The vote was in effect an endorsement of Nagai's efforts to turn around the investment bank, which reported an annual loss in April and said it would not pay out bonuses to directors.
Sep.18 -- Yoshikazu Yonenaga and Noritaka Ochiai, co-chief executive officers of Line Securities Corp., Nomura Holdings Inc.’s new online brokerage venture with mobile messaging provider Line, talk about the prospects and strategy for the business.