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SMBC Nikko, Daiwa increase hiring

by Takahiko Hyuga

Bloomberg

SMBC Nikko Securities Inc. and Daiwa Securities Group Inc. have increased their hiring targets for university graduates to bolster retail brokerage operations as stocks rally.

SMBC Nikko recruited 460 graduates to start in April, 50 more than earlier planned, spokesman Tadataka Ishida said Wednesday. Daiwa, Japan’s second-biggest brokerage, raised its target by 23 percent to 617, spokeswoman Misato Kinoshita said.

Profits at securities firms have surged since Shinzo Abe became prime minister last December and ushered in policies that made Japanese equities the best performers in the developed world. Households face an erosion in the value of their cash savings if Abe achieves his goal of sparking inflation, increasing the attractiveness of investing in stocks.

“Individuals’ money is returning to the stock market on expectations for ‘Abenomics,’ ” Takayuki Okuma, manager of recruiting at SMBC Nikko, said. “We expanded the hiring numbers to build a framework to approach more customers, including new types of investors.”

SMBC Nikko will assign the 50 extra graduates to trade financial products, including stocks for individuals, Ishida said. Daiwa will hire 117 more graduates than originally planned to expand retail brokering, Kinoshita said.

The benchmark Topix index has climbed 45 percent this year on the back of Abe’s efforts to stimulate the economy with fiscal spending and monetary easing.

The Topix will reach 1,420 at the end of 2014, 15 percent above Tuesday’s close and a level unseen since June 2008, Naoki Kamiyama, chief Japan equity strategist at Bank of America Corp., predicted in an interview Tuesday.

SMBC Nikko plans to assign most of next year’s recruits to the retail business, Ishida said. About 20 will go to investment banking, six to sales and trading, and five to research, he said. The unit of Sumitomo Mitsui Financial Group Inc. hired 293 graduates last April.

The brokerage pays a basic monthly salary of ¥260,000 for graduates. Ten of the recruits, who were selected to work in investment banking areas such as merger advisory and capital markets, will be paid as much as ¥625,000 a month, Ishida said.

SMBC Nikko opened an office in San Francisco in October to tap overseas investors’ demand for Japanese stocks. It also doubled the size of its Hong Kong office, adding a second floor in Citibank Tower.

The firm will open two retail branches — in Tokyo’s Ginza shopping district and Umeda in Osaka — in February, increasing total outlets to 111, it said in a statement last week.