Global investors are approaching the bank for insights amid rising interest in Japanese equity markets, says Nomura Asia Pacific Holdings’ CEO
NOMURA’s strong Japanese branding is helping the investment bank propel growth of its Asia-Pacific business.
Given the bank’s strong background and knowledge of Japan, global investors are increasingly approaching Nomura for insights amid rising interest in Japanese equity markets, said Kenji Teshima, CEO of Nomura Asia Pacific Holdings.
“Clearly, since the interest has shifted to Japan,” he said. “Clients who used to be fair to all the banks may now prioritise talking to Nomura to see how Japan is doing.”
For Teshima, who has worked in the Asia-Pacific region for 11 years, the difference in the Japanese bank’s positioning among competitors is “night and day”.
Interest in the Japanese stock market has climbed since regulators set out a series of corporate reforms to boost capital efficiency and valuations.
The Nikkei 225 crossed the 42,000 mark for the first time to hit an all-time high on Jul 11, on the back of a rally of Japanese tech stocks.
Teshima noted that Nomura has always been known as a strong bank from Japan, so it has been able to capture interest “quite early”, as clients increasingly seek their views on the market.
These clients are typically from the Asean, Hong Kong, Taiwan and South Korean markets.
Teshima also noted some investors that were invested elsewhere are also expressing more interest in Japan now – this includes those from mainland China, who were traditionally invested in the US.
Apart from sharing about investment opportunities in Japan, Teshima said the bank can also share other priorities it has around Asia and elsewhere.
Outside of Japan, Nomura’s business in Asia comprises its global markets business – which includes its fixed-income unit, equities unit and wealth management arm – as well as its investment banking business.
Pre-tax income for the Asia ex-Japan business stood at 23.8 billion yen (S$215 million) for its financial year ended Mar 31, 2024, representing about 9 per cent of the bank’s overall business for the year.
Contributions vary from year to year depending on how other regions have done. In the previous year, the segment accounted for 21 per cent of the bank’s overall business, when pre-tax income stood at 31 billion yen.
Teshima noted that the bank “shines best” in its global markets business, but highlighted that it is actively trying to grow its international wealth management segment.
Nomura has offices in Singapore, Hong Kong and Dubai that focus on the wealth management theme – targeting clients in South-east Asia, Greater China and the Middle East, as well as the global South Asian and non-resident Indian population.
Teshima said the bank’s strategy is to focus on the international wealth management centres instead of trying to compete with local players in every other country, who may have a stronger expertise.
This offshore model is much like other international banks, he noted.
He also noted opportunities for the bank to grow its equity products business, by leveraging its knowledge from building up a strong equity products franchise in other markets such as Japan and the US.
“I think if we can use knowledge of how we grew those businesses in the other region, it will be faster to grow, because we have some knowledge on who and what kind of products to focus on,” he said.
Teshima also spoke about opportunities in the growing private markets space, especially amid the higher interest rate environment.
“The clients are always looking for creative ideas to diversify the ways they finance their business. And sometimes we can add value by structuring something different from just bank loans,” he said.
At this juncture, Nomura is looking at tailor-made solutions and choosing the right opportunities that will benefit both the client and the bank.
Zooming in on Singapore, Teshima said Nomura is shoring up its operations in the city-state over the years, steadily increasing its headcount in Singapore to over 200, with several leaders based in the office.
The bank has a dual-hubbed strategy with Singapore and Hong Kong.
Hong Kong remains a stronger market for its equities business, given its proximity to larger equity markets in mainland China, Taiwan and South Korea.
But Singapore also has proximity to markets that the bank is focusing on – such as India and Australia – and has a better market for its fixed-income business, Teshima said.
He noted that the city-state is attracting many global companies, which bodes well for the economy and deal flows. It is also a prime place to capture deals into regional markets such as Vietnam and Indonesia.
