May 16, 2013 / 9:41 AM / in 5 years

UPDATE 1-Japan broker Daiwa plans branch expansion on Nikkei boom

* Daiwa CEO wants to boost number of retail branches by 50 pct over several years

* CEO says Abenomics-driven Japanese stock rally is ‘historic turning point’

* Rival SMBC Nikko planning to boost branch network by 20 pct over next 3 years (Adds details, CEO quotes, background)

TOKYO, May 16 (Reuters) - Daiwa Securities Group Inc plans to expand its retail network by 50 percent over the next few years to capitalise on “a historic turning point” for Japanese stocks, the head of Japan’s second-biggest brokerage said on Thursday.

“Right now the Japanese market is the most exciting in the world,” Daiwa CEO Takashi Hibino told a briefing for media and analysts, crediting Prime Minister Shinzo Abe’s policies to fix the economy with sparking growing interest in the stock market.

“There is no bigger business opportunity out there.”

Japan’s Nikkei average closed on Thursday at 15,037.24, near five-and-a-half year highs reached in a rally of 70 percent over the past six months.

While the expansion plan for Daiwa’s 123-branch network has yet to be officially approved by the brokerage’s management, Hibino said Daiwa would mainly add satellite branches, which are typically smaller and cost less to operate than large, flagship branches.

It would also boost by about 50 percent its staffing at branches and call centres, currently around 4,000, Hibino said, and add several billions of yen to its fixed cost base.

Last month SMBC Nikko Securities, Japan’s third-largest brokerage, unveiled plans to add 25 new branches over the next three years for an increase of about 20 percent. Industry leader Nomura Holdings Inc has not disclosed any plans to add to its nationwide network of around 180 branches.

Japanese brokerages reported bumper profits in the latest quarter with the Nikkei upswing pumping up their bread-and-butter businesses of broking stocks and mutual funds.

Hibino said he was optimistic that Abe’s reflationary economic policies would accelerate a shift of Japanese household financial assets, collectively equal to $15 trillion, out of savings accounts and into the markets.

Japanese now have 13 percent of their assets in marketable securities. If doubled to 28 percent - the average of Britain, Germany, France, Italy and Canada - that would unleash a 236 trillion yen pool of capital for investment, Daiwa said. ($1 = 102.4250 Japanese yen) (Reporting by Nathan Layne and Emi Emoto; Editing by Chris Gallagher and Edmund Klamann)

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