A Japanese startup is entering the equity research business in a bid to challenge the dominance of securities firms by using computers to crunch vast troves of information and predict companies' earnings.
Nowcast Inc., a financial-technology venture formed last year out of the University of Tokyo, will begin providing automated earnings estimates of consumer goods makers as soon as October by analyzing millions of transactions at retail stores, Chief Executive Officer Ryota Hayashi said.
The move comes as pressure from Japan's financial regulator prompts brokerages to move away from a long-standing practice of gleaning information from companies about their performance before earnings figures are released. Hayashi sees this as an opportunity for Nowcast to find other ways to estimate companies' results and sell the research to active investors such as hedge funds.