Nomura files application for securities company in China
The ultimate goal of the move is to grow the business into a full-fledged brokerage that will form a core part of Nomura’s strategy in Asia ex-Japan.
China has just reiterated its appeal for financial services companies, as Nomura Holdings Inc (TYO:8604) today confirmed that it aims to set up a joint venture securities firm there.
The financial services giant said it applied to the China Securities Regulatory Commission (CSRC) to establish a securities JV. The application was filed on May 8, 2018. Nomura plans to make detailed preparations for the securities company subject to discussions with the CSRC and other relevant parties.
The new company will initially focus on leveraging Nomura’s expertise in face-to-face consulting to provide wealth management services to mass affluent individuals in China. The next step will be the development of product distribution channels and the expansion into Wholesale and other business segments. The ultimate goal is to grow the business into a full-fledged brokerage that will form a core part of the firm’s strategy in Asia ex-Japan.
Nomura has been steadily pushing to expand into China and Hong Kong. In March this year, Nomura Asset Management Co., Ltd. (NAM), a wholly owned subsidiary of Nomura Holdings, announced that it had entered into an agreement with FinTech company 8 Securities Inc. and its Hong Kong headquartered parent company 8 Limited to acquire shares through a third-party allotment.
8 Limited provides mobile app robo-advisory and online brokerage services in Hong Kong, through local affiliate FinTech company 8 Securities Limited. NAM will acquire ordinary shares issued by 8 Securities and 8 Limited. NAM plans to invest approximately JPY 1.6 billion in 8 Securities and will hold a majority of the outstanding shares. The investment in 8 Limited will be approximately JPY 1.1 billion, and NAM will become a minority shareholder.
Another Japanese financial giant – Mizuho, has also taken steps to expand into China. Today, Mizuho Bank, Ltd. said it signed a Comprehensive Cooperation Agreement regarding commercial banking with the Export-Import Bank of China, a major state-owned financial institution.
In its announcement, Mizuho notes China’s efforts to promote trade liberalization through actions such as reducing import duties and relaxing regulations in the financial and automotive sectors. Foreign direct investment in China is expected to further increase going forward.
The Comprehensive Cooperation Agreement aims to provide enhanced services for companies seeking to enter or expand business in China or in countries along the Belt and Road. Mizuho Bank will work with the Export-Import Bank of China to offer clients with economic and business insight on China and the Belt and Road economic corridors as well as provide a broad range of financial services including trade finance and project finance with the ability to handle renminbi-denominated transactions.
