Japan's biggest broker, Nomura Holdings, may consider acquisitions as a possible route to enter India's booming stockbroking business, an executive said on Tuesday.
Hiromasa Yamazaki, head of Nomura's global equities business, said the firm wants to build a cash equities and derivatives business in India, Asia's third-biggest economy, either from its own resources or through acquisition.
"We want to enter India just simply because of the huge growth potential there. Anything is possible for Nomura," Yamazaki said in an interview.
He said Nomura hopes to double its profit from equity business outside Japan in about five years.
Indian newspapers reported last month that Tokyo-based Nomura may buy a 35 percent stake in unlisted financial services group Enam for 14 billion rupees ($340 million).
Yamazaki declined to comment on those reports, but said Nomura wants to develop its equities operation as well as other businesses in India.
Other foreign players such as Citigroup, Merrill Lynch and BNP Paribas have invested in India's fast-growing brokers as the local stock market booms.
India's main stock index rose 73 percent in 2003, 13 percent in 2004, 42 percent in 2005 and 47 percent last year. So far this year it is up 7.4 percent.
Yamazaki said Nomura Securities is also looking at other Asian emerging markets such as Indonesia and Vietnam to build its equities business and, beyond Asia, to expanding into Russia.
Nomura Holdings and Daiwa Securities Group are trying to expand business beyond their home market to catch up with rivals such as Goldman Sachs and UBS.
Daiwa Securities SMBC, Japan's second-biggest broker, aims to more than double profits from its foreign businesses by 2012 as its parent announced a 100 billion yen ($807 million) Asia investment plan, the brokerage firm's president Shin Yoshidome told Reuters last month.
Yamazaki said Nomura's international equity business -- which excludes investment banking -- contributes around a quarter of the securities firm's profits, which he wants to double in five years to 50 percent. He said the expansion would also see revenue from its international business grow to 50 percent over the next 2-3 years.
Yamazaki said Nomura plans to focus on derivatives, options trading, futures and a specialized business for hedge funds called "synthetic prime brokerage", which helps funds use share swaps to structure trades.
He said the synthetic prime brokerage will be one of the key products for global hedge funds seeking access to the Japanese market and Asia.
Yamazaki said one reason why Japanese brokerage firms are looking beyond their home market is that Japanese investors want to diversify their investment portfolios.
rgds.,
Japan Shah
japan.shah@gmail.com
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