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A scandal involving alleged stock market manipulation by SMBC Nikko Securities Inc. has damaged the firm’s corporate bond underwriting business just as issuers and investors are increasingly adopting environmental, social and governance targets into their business strategies.

The securities arm of Sumitomo Mitsui Financial Group Inc. underwrote ¥273.2 billion ($2.1 billion) in domestic bond deals this year through May 23, down 60% from ¥674 billion in the same period last year. That’s the biggest drop among Japan’s five major brokerage firms, according to Bloomberg data. Its market share fell from 15.8% to 7.3%.

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