INTERVIEW: Daiwa Sec. to Set Up Joint Brokerage Venture in China

August 24, 2018

Tokyo- Japan's Daiwa Securities Group Inc. will set up a joint brokerage venture in China with a local firm, President Seiji Nakata has said.

"We cannot ignore China, considering the size of its economy," Nakata said in a recent interview.

The major Japanese brokerage house will decide which Chinese company to partner with and work out details of the joint unit, such as the investment ratio, by the end of this year. It hopes to seek Chinese authorities' approval for the new firm as soon as possible.

The move follows the Chinese government's decision to allow foreign financial institutions to take majority stakes in domestic companies.

Daiwa will be operating a joint venture in China for the first time since 2014.

"It's natural for us to take the opportunity afforded by the relaxation of regulations to establish a solid base" in China, Nakata said.

In line with the expansion of the Chinese economy, companies in the country have become active in mergers and acquisitions involving foreign businesses and went public one after another.

At the same time, many foreign companies have entered the Chinese market thanks to the ownership deregulation.

Daiwa operated a joint brokerage venture with a Chinese firm in Shanghai in 2004-2014. It was the only Japanese securities company that had a joint firm in China.

With foreign ownership capped at 49 pct at the time, Daiwa faced difficulty doing business as it intended and decided to leave the country. Jiji Press