TOKYO (Reuters) - Nomura Holdings Inc (8604.T) reported a 14-fold jump in quarterly profit from a year earlier, but slowing trade in Tokyo stocks has knocked some wind out of a resurgence of Japan’s largest investment bank.
Nomura has seen its fortunes improve markedly this year thanks largely to the aggressive economic growth agenda of Prime Minister Shinzo Abe, who came to power in December, renewing investor interest in Japanese stocks.
Nomura has also shored up its overseas operations through cost-cutting and focusing on pockets of strength, such as its fixed income operations.
But the latest quarterly results underscore just how intertwined Nomura’s fate is with the course of Abenomics, as the premier’s policies are commonly known.
The flow of money into Japanese equities has slowed in the past few months as investors become skeptical about whether Abe can deliver on promised reforms, cutting into Nomura’s bread-and-butter businesses of selling shares and mutual funds.
The benchmark Nikkei stock average was up 63 percent as of September 30 compared with a year earlier, but it was up just 6 percent for the July-September quarter.
Nomura on Tuesday posted a net profit of 38.1 billion yen ($389.9 million) for July-September, up sharply from 2.8 billion yen a year earlier, but down from 65.9 billion yen in April-June.
The result was lower than the Starmine SmartEstimate of 43 billion yen, derived from the projections of four top-ranked analysts.
Nomura is still on pace to nearly double its earnings in the full year ending March 2014, with analysts projecting an annual net profit of 207 billion yen, up from 107 billion in the year to March 2013.
Prior to the results, shares of Nomura closed down 0.7 percent at 737 yen. The stock is up 47 percent since the start of the year, underperforming a 62 percent rise in the Japanese securities industry subindex .ISECU.T. ($1 = 97.7100 Japanese yen)
Additional reporting by Taiga Uranaka; Editing by Christopher Cushing and Jean Yoon