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SMBC Nikko enters San Francisco

Bloomberg

SMBC Nikko Securities Inc., the brokerage arm of the nation’s second-biggest bank by market value, opened an office in San Francisco at the beginning of this month to tap overseas investors’ demand for Japanese equities.

The unit of Sumitomo Mitsui Financial Group Inc. will also double the size of its Hong Kong office by Dec. 31, adding a second floor in Citibank Tower, said Tadataka Ishida, a Tokyo-based spokesman at SMBC Nikko.

SMBC Nikko Chief Executive Officer Tetsuya Kubo plans to increase overseas employees in equity and bond sales, trading and investment banking by 25 percent in three years as Japan’s stock rally attracts foreign investors and spurs domestic sales.

The firm’s first San Francisco office to be established since 1992 opened Oct. 1 and will house several sales employees, Ishida said.

It’s competing for equity business with brokerages including Nomura Holdings Inc. amid a 40 percent surge in the Nikkei 225 stock average that has made Japan outperform major markets.

Stocks have gained since December, when Prime Minister Shinzo Abe took office on pledges of fiscal spending and monetary easing to revive the economy.

SMBC Nikko is the fifth-ranked equity underwriter for Japan stocks in 2013, eclipsed by No. 1 Nomura and second-placed Daiwa Securities Group Inc., according to data compiled by Bloomberg. Japanese firms have raised ¥4.1 trillion so far this year, already exceeding the ¥2.1 trillion for all of 2012, data show.