Japan’s Big Brokerages Post Dismal Results

Japan’s Big Three brokerages posted dismal results for the April-June quarter as depressed share turnover and deregulated commissions hurt profits. Asia’s economic turmoil also took its toll, representatives of Nomura Securities, Daiwa Securities and Nikko Securities said at separate news conferences at the Tokyo Stock Exchange. Industry leader Nomura saw profit fall 58% to $105 million, from $248.4 million in the same period a year earlier. Second-ranked Daiwa posted a drop of 84% to $17 million from $109 million. Nikko saw losses balloon to $52.6 million from $13.7 million. The bleak performances coincide with the launch of Japan’s “Big Bang” financial deregulation, which started in earnest April 1. Liberalization of commissions on stock transactions exceeding $355,619 and the lifting of restrictions on foreign exchange to allow investors greater ability to put money abroad were among the first initiatives. Penalties imposed by the Finance Ministry for involvement in a payoff scandal dogged Daiwa through late April, and similar punishments against Nikko weighed on results.