Business / Corporate

Daiwa Securities plans return to China via joint brokerage

JIJI

Daiwa Securities Group Inc. will set up a joint brokerage venture in China with a local firm, President Seiji Nakata said.

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

The major brokerage house will decide which Chinese company to partner with and work out the details, such as the investment ratio, by the end of the year. It hopes to get approval from the Chinese government as soon as possible.

The move follows the Beijing’s decision to allow foreign financial institutions to take majority stakes in domestic companies.

It will be Daiwa’s first joint venture in China 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 there have become active in mergers and acquisitions involving foreign businesses that have gone public one after another.

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

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

With foreign ownership capped at 49 percent at the time, Daiwa faced difficulty doing business as intended and eventually decided to leave the country.