Nomura shares dive as clients turn elsewhere
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Shares in Nomura Securities yesterday fell to their lowest level in more than four-and-a- half years, and at least 10 large clients announced they were suspending business with the brokerage, after revelations about a trading scandal linking the company with extortionists.
Nomura's shares fell by 100 to 1,370, about 700p, making a 13 per cent drop since last Thursday when it announced that two directors illegally funnelled trading profits to a company linked to a racketeer.
At least 10 institutional investors have suspended business with Nomura since the scandal, and the company's president, Hideo Sakamaki, has indicated that he will probably resign within the next few weeks.
The Japanese government's Pension Fund Association has pronounced Nomura unworthy of trading on its behalf. Among the other companies which have suspended their business are Dai-Ichi Mutual Life Insurance Co, the Long Term Credit Bank of Japan, Sumitomo Trust and Banking, and Mitsui Trust and Banking. Even the US subsidiary, Nomura Investment Management, has stopped business with its parent company in Tokyo, as has Calpers, the California Public Employees Retirement System.
According to BZW Securities (Japan) yesterday the flight of its clients could cost Nomura as much as 50bn in lost revenues from trading commissions and underwriting new securities. "It could take several years for the ground lost to be recovered," said David Threadgold, BZW's analyst in Tokyo.
The scandal, and the ensuing losses, come at a time of increasing uncertainty in Japanese finance, as the government embarks on a long-awaited programme of deregulation intended to improve competitiveness - Japan's so-called "Big Bang".
According to Ayako Sato, of UBS Securities, a change of management in Nomura "may delay efforts to devise effective Big Bang counter-measures".
On Monday, two managing directors of Nomura resigned. Yesterday, executives of a second Japanese company were arrested on charges that they paid large sums to a so-called sokaiya - a gangster.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments