Nomura Securities to expand institutional equities business in China

Global investment bank Nomura Securities plans to expand its institutional equities business and build its research capabilities in China, targeting the private market as a key pillar of business growth in Asia, an executive said on Tuesday.

After the establishment of the majority-owned securities joint venture in China, Nomura Orient International Securities, the Japanese company has added a second branch in Beijing, and opened a third in Shenzhen in July. 

Toshiyasu Iiyama, executive managing director of Nomura Holdings Inc and chairman of its China Committee, said the expansion so far in China "has been encouraging".

"Over the next few years, all these businesses across our Wholesale division are looking to add to their capabilities in China by collaborating with Nomura Orient International," Iiyama said at Nomura's China Investor Forum 2021 via a video on Tuesday. 

Nomura estimates China's GDP growth is likely to reach 8.2 percent this year, although there could be some downward pressure in the coming quarters.

Lu Ting, Nomura's chief economist in China, said ongoing monetary and fiscal easing measures appear insufficient to stimulate China's economic growth, which has shown some signals of moderation in the second half of this year.

Rob Subbaraman, head of Global Macro Research and co-Head of Global Markets Research at Nomura, said on Tuesday that as COVID-19 still exists, the unprecedented global fiscal and monetary policy support is starting to wane and will become less supportive to global growth. 

Also, it's impossible that inflation pressure will disappear in the next year, driven by higher costs as the global supply chains may remain fragile, he said.

The speed of monetary policy normalization will vary among central banks, likely resulting in sizable exchange rate moves, Subbaraman predicted.