Nomura Holdings, the top brokerage in Japan but a smaller player elsewhere in Asia, has launched a property investment business

Nomura Holdings, the top brokerage in Japan but a smaller player elsewhere in Asia, has launched a property investment business and is investing in companies before they go public to help build up its equities business in the region, a top banker said.

Philippe Espinasse, who joined Nomura as co-head of Asian equity capital markets two months ago, said that the brokerage wants to grow beyond selling deals to Japan’s vast investor base. ‘We’re definitely expanding the focus beyond the Japanese distribution channel,’ said Mr Espinasse, who was previously head of Asia equity capital markets at Macquarie Bank .

Nomura ranks far down the league table this year in 70th place for equity capital markets deals in Asia-Pacific outside Japan, well below its 16th and 15th place finishes for 2006 and 2005, respectively, according to Thomson Financial.

‘As one of the very top investment banks in Asia including Japan, definitely, I’d like to get back in the Top 10 for Asia ex-Japan ECM,’ said Mr Espinasse, who has spent a big chunk of his first months on the job flying around the region to meet clients.

Nomura is looking to put more of its own capital to work by investing in companies ahead of their initial public offerings (IPOs), which would put it in pole position for underwriting mandates. ‘You have to select your niches, go after transactions in sectors where you have a competitive edge,’ he said.

Powered by China and India, Asia is a growth engine for global investment banks and Nomura is battling established players in the region such as UBS, Goldman Sachs and Morgan Stanley, as well as banks that have been recently beefing up operations in the region, such as Lehman Brothers and Bear Stearns.

‘At the end of the day, it’s about being more aggressive and confident, going on the road and meeting clients and explaining how and where Nomura can add value,’ Mr Espinasse said.

Nomura, which has said that it is weighing acquisitions to enter the booming stockbroking business in India, was one of five banks to help India’s HDFC Bank Ltd raise US$698 million through an American Depositary Share issue.

Mr Espinasse said that while Nomura would continue to take advantage of its distribution capability in Japan, where cash-rich retail investors are increasingly buying overseas assets, the brokerage also wants to leverage its network of 340 global sales staff who focus on Asia outside Japan. ‘The key for my side of the business is to significantly expand the business beyond our highly successful Japanese primary equity distribution franchise.’

To that end, the brokerage in July started its Asia Asset Finance unit in Singapore, which will invest in property around Asia and develop a real estate investment trust (Reit) business.

‘That is something we are keen to do more of in Asia ex-Japan,’ said Mr Espinasse, who has Reit experience from his stint with securitisation specialist Macquarie. He said that the property arm would grow to about a dozen people.

Singapore is the top property trust market in the Asia-Pacific after Japan and Australia.



Source: Reuters (Business Times 17 Sept 07)