Nomura JV exploits opening-up, further taps financial services

Japanese financial firm Nomura Securities Co Ltd is preparing to launch business operations of its joint venture in China soon and is eyeing new opportunities as the country pushes further financial liberalization.

The newly established joint venture of the Japanese brokerage in China will initially focus on the wealth management business and will gradually expand into other areas, including initial public offering underwriting, equity and fixed-income business, mergers and acquisitions, and asset management, according to Toshiyasu Iiyama, executive vice-president of Nomura Securities and chairman of its China committee.

"We will start everything from the scratch," Iiyama said in a recent interview with China Daily. "China's opening of the financial sector makes us more confident about what we can do in China and what we can contribute to this market.

"Although we start with the wealth management first, that is not our goal. Our goal is to provide wider financial services. We understand that one business model is not sustainable. We have to combine different areas of business."

His comments came after China announced a set of new measures to further liberalize financial services. The new policy gives foreign companies greater market access in areas like asset management, pension fund management and currency brokerage. It also involves deregulation in bond underwriting and credit rating business.

The Japanese brokerage gained the Chinese regulatory approval in March to set up a securities joint venture in which it owns a controlling stake of 51 percent. The Japanese financial group also gained the license as a wholly foreign owned private fund manager to raise onshore funds to invest in China's A-share market.

"I believe many international banks will follow suit. They have their own strength and they will bring that into the Chinese market, which will further broaden and deepen the Chinese market and benefit the Chinese investors and corporations," Iiyama said.

Iiyama said that he hoped there could be more liberalization for Chinese investors to invest overseas so that Nomura could leverage its network strength in Asia to provide Chinese investors more valued-added products and services.

The Shanghai Stock Exchange in June launched the China-Japan ETF Connectivity scheme, allowing investors in both countries to invest in each other's exchange traded funds market.

Yi Huiman, chairman of the China Securities Regulatory Commission, said earlier that the China-Japan ETF trading link will help enrich cross-border mutual fund products for Chinese investors and make it easier for investors in both countries to invest in each other's market, which is of great significance for deepening capital market cooperation between the two countries.

Iiyama said that Nomura Securities will take advantage of the trading link. "ETF listing is a good start. If the ETF market grows, it will draw more investors and will further deepen and broaden investment opportunities," he said.

Ou Zhen contributed to this story.