Investment Banking-r2:AMM grid in qxp 12/24/09 9:33 AM Page 29
Waterhousecertainlyrefusesto“buyintothespinthatnotbeing TheexpansionannouncementsosoonaftertheJVdissolutiondoes
partoftheSumitomoMitsuiempireisactuallygoingtoopenup notlookcoincidental.AndSuzukiadmitsthatDaiwa’sAsiaambitions
opportunitiesforDaiwa”. werepreviouslyconstrainedbySumitomoMitsui.
Hebelievesthatbychoosingtoexpandorganically,Daiwa“hascon- “WhenwesaidwewantedtoopenanewAsianoffice,sometimes
demneditselftoveryslowgrowth,andthatmeansthatithashandedthe theywereopposed,saying‘Whydon’tyouuseourfacility?’”
winner’slaurelstoNomura.Unfortunately,Daiwahasrelegateditselfto However,HibinoarguesthatthebreakdownofthewholesaleJVwas
thelesserranks”. notthemainreasonforDaiwa’sAsiapush.Ratheritisarecognitionthat
Ratingagenciesalsohavetheirdoubts. thebrokeragemustexpandoutsideJapantogrowatall.
“DaiwaSecuritiessayslessthan10%ofitswholesalebusinesscomes “TheJapanesemarketisnowobviouslygoingtoshrink,”hesays.
fromrelationshipswithSumitomoMitsuicustomers,butwhenyoutrack “Thefactisgettingclearerandclearer,daybyday.Whenwethinkabout
theirdisclosure,it’salmost20%,”saysNaokoNemoto,managingdirector oursustainablegrowth,ofourprospectsin10years,wehavetogoout
forJapanesefinancialinstitutionsatStandard&Poor’s. ofJapan.”
“SomepeoplewillbeconcernedwhetherDaiwaasafullyindepend- Asia&Oceaniaproducedjust6%ofDaiwa’stotalrevenueintheyear
entgroupcouldstillbeconsideredastrongcounterparty,withoutthe endingMarch2009. Thelion’sshare,75%,camefromJapan,followed
backingofthebank,”addsEhsanSyed,directorofJapanesefinancial byAmerica(10%)andEurope(9%).
institutionsatFitchRatings.
However,SyednotesthatSuzukimayhaveapoint,asDaiwanowhas MISSINGTHEPARTY
thepotentialtosecuremoreunderwritingbusinessfromMizuhoand WhileDaiwa’sAsiaexpansionplansmakesense,theymaybe12months
MUFG. toolate.
Asianinvestmentbanksshedstaffascapitalmarketswereham-
ASIAEXPECTATIONS meredinlate2008,butthenthemarketsroaredbacktolifeinthelatter
Daiwa’splansextendbeyondnabbingbusinessitwasoncebarredfrom. halfof2009.Decentbankersareoncemorekeenlysoughtafterasthe
SuzukiisalsoactivelyplanningtomakeAsiaameaningfulrevenuecon- likesofBarclaysCapital,StandardChartered,ANZ,HSBCandothers
tributor. stockup.
Theinvestmentbank’splansannouncedinNovembertoinvest HibinoadmitsDaiwa’sresponsehasbeensluggish.Choosinghis
US$1.15billiononexpandingitsAsianoperationsoutsideJapan,include wordswithcare,hesays,“MrSuzukiisespeciallykeenthatweshould
hiring470peopleinthenexttwotothreeyears,ontopofits650regional focusonAsia.Forseveralyearsithasbeenhisbelief,althoughasyet
staff. actualmovementhasbeenratherdullorslow.”
SuzukiwantsHongKongtobecomeDaiwa’s“secondheadquarters”, Givenspirallingwagesandmultipleemploymentoptions,Daiwa’s
headedbydeputypresidentTakashiHibino,withanotherfourorfive Asiainvestmentplanlookssomewhatfrugal–especiallywhencom-
boardmembers. paredtotheoutlayofarch-rivalNomura.
“Wearealsoplanningtohiretopanalystsandinfluentialfigureswith InSeptember2008NomurasnappeduptheAsiaandEuropeanbusi-
strongconnectionsforouradvisoryboard.” nessesofcollapsingUSinvestmentbankLehmanBrothers.Theacquisi-
Theratherambitiousaimistobecomeoneofthetopfivebrokersin tioncostitamereUS$285million,adding2,600frontlinestaffplus
Asiaex-Japanbynextyear,andamongthetop10underwritersby2012. 2,900inaMumbaibackoffice.
It’satallorder.AsofDecember10,Daiwaranked93rdasanequity ButwhileNomuraCEOKenichiWatanabecalledthedeal“thebar-
capitalmarkets(ECM)bookrunnerinAsia-Pacific,accordingtoDealogic. gainofthecentury”,hehadtosetasideabonuspoolofUS$2billionto
HibinotellsAsiamoneythatrecruitingtoptalentiskey. inducetheex-Lehmanhirestostay.
“Themostimportantandvitalthinginrealisingourtargetwillbehir- Nevertheless,thepurchasewasanimmediatefillip.Nomura
ingtalentedpeople,”hesays.“Successwillhingeonthis.” arrangedthemostAsia-Pacificstocksalesin2009,accordingto
Daiwaispreparedtooffer“competitive”compensationtolocalhires, Bloomberg,upfromseventhplacelastyear.Watanabeboastedthat
hesays,thoughitwantspeoplewhodonotjustcareaboutmoney.“We betweenJuneandSeptemberitdrewinmorerevenuesfromoverseas
wantthemtodevelopthebusiness.” thanonshoreforthefirsttime.
JAPANALLECMBOOKRUNNERRANKING
2009YTD
2008 2007
Rank Bookrunner Dealvalue(US$m) No. %share Rank Dealvalue(US$m) No. %share Rank Dealvalue(US$m) No. %share
1 Nomura 25,693 47 50.6 1 5,244 27 34.9 1 10,375 77 41.2
2 Daiwa Securities SMBC 6,868 12 13.5 2 2,975 21 19.8 2 2,516 60 10.0
3 Goldman Sachs 5,184 6 10.2 7 726 2 4.8 12 230 2 0.9
4 Mizuho 3,018 12 6.0 9 327 19 2.2 6 1,998 57 7.9
5 Morgan Stanley 2,082 4 4.1 6 910 2 6.1 7 1,248 6 5.0
JAPANALLDCMBOOKRUNNERRANKING
2009YTD
2008 2007
Rank Bookrunner Dealvalue(US$m) No. %share Rank Dealvalue(US$m) No. %share Rank Dealvalue(US$m) No. %share
1 Mizuho 72,259 371 25.8 1 64,541 286 29.2 1 44,986 322 21.8
2 Nomura 52,230 290 18.6 2 35,136 196 15.9 2 33,705 250 16.3
3 Mitsubishi UFJ Securities 47,938 236 17.1 3 34,215 202 15.5 4 30,162 223 14.6
4 Daiwa Securities SMBC 37,616 234 13.4 4 32,101 196 14.5 3 31,872 221 15.4
5 Citi 20,989 133 7.5 5 19,758 143 8.9 5 13,718 118 6.6
SOURCE: DEALOGIC
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