Nomura goes quarterly to monitor rocky markets

Japan's biggest brokerage, Nomura Securities, has responded to shareholder worries over fluctuating earnings from volatile markets by announcing quarterly figures, instead of just half yearly.

Others are expected to follow Nomura's example. In the first quarter, Nomura made 2.35bn (pounds 16.8m) in profit on revenue of 82.05bn (pounds 586.2m), despite sluggish stock markets.

But these figures did not include gains and losses on investments in securities, as is normal with end of year results.

Nomura did not reveal any comparable year-on-year figures. In the full 1994/95 year to 31 March, it made profits of 6.80bn on revenue of 334.98bn.

Nomura's April-June profits largely came from bond dealings at a time when interest rates were moving to historically low levels and bond markets were rising, said Nomura vice president Atsushi Saito.

Commissions on convertible bonds broking also rose sharply after investors began actively buying them because of their higher yields compared with straight bonds, he added.

Nomura earlier said it would make quarterly disclosures as brokerage profits "boom or bust" on stock market conditions, and more frequent disclosures benefited investors.

Analysts expected that two other big brokerages - Daiwa Securities and Nikko Securities - would have also been in the black for the first quarter.

Earlier, the Nihon Keizai Shimbun economic daily reported that Nikko made 14bn profits and Daiwa 10bn, but Yamaichi Securities lost more than 3bn.

The three bigger firms earned profits on bond business, "but many smaller houses may have failed to post profits as they lack the financial strength necessary to take large positions in bond dealings," an analyst with a Japanese research company said.

The big firms' relatively lower reliance on stockbroking commission income meant Nomura could ride out low turnover on the Tokyo Stock Exchange in the first quarter, he said.

"Second-tier brokerages' dependence on commission income on stockbroking accounts for some 50 per cent of their revenue, but Nomura's is 30 per cent or so," he said.

TSE turnover, down because of a weak economy and strong yen during the period, averaged 217.5bn a day in April-June, down 32 per cent from a year earlier.