Announcing the 2014 Share and Quality Leaders in Japanese Equities and Equity Derivatives

Japan’s large equity brokers are building on recent impressive gains among domestic institutions by capturing considerable market share with foreign investors active in Japanese equities, according to a new report, Japanese Brokers’ Big Bets Paid Off at the Expense of Foreign Competitors, from Greenwich Associates.

Nomura Securities, Daiwa Securities and Mitsubishi UFJ Morgan Stanley Securities all picked up commission-weighted research/advisory vote share to varying degrees over the past year. However, the biggest gainers over the past two years were Mizuho Securities and SMBC Nikko Securities.

In 2014, the top Japanese firms’ biggest gains came from foreign and offshore institutions that generate the majority of the market’s trading commissions and have traditionally been the stronghold of non-Japanese brokers. “Of course, economic growth and market performance do not follow a linear path, and it remains to be seen how things will continue to play out for the Japanese market and the major brokers in 2015,” says Greenwich Associates consultant Tomio Sumiyoshi. 

2014 Greenwich Share and Quality Leaders

Japanese Equity Research/Advisory: With a 15.6% commission-weighted share of the vote by which institutions allocate commissions to providers, Nomura Securities is the clear leader in research/advisory services. In a three-way tie for the second spot, Daiwa Securities, traditionally a Top 2 player, is joined by up-and-comers Mizuho Securities and SMBC Nikko Securities—all with vote shares of 10.6–11.2%. Rounding out the Top 5 Greenwich Share Leaders in Japanese Equity Research/Advisory Services is Mitsubishi UFJ Morgan Stanley Securities at 7.9%.  Extending its strong showing over many years, Nomura is the 2014 Greenwich Leader in Japanese Equity Research/Analyst Service Quality. 

Japanese Equity Trading: Nomura Securities is the 2014 Greenwich Share Leader in Japanese Equity Trading among Asia/Pacific-based institutions with a 12.1% trading share, followed by Daiwa Securities and Mizuho Securities, which are tied with shares of 8.2–8.5%. Deadlocked, the next four firms include two Japanese brokers, SMBC Nikko Securities and Mitsubishi UFJ Morgan Stanley Securities, and two foreign firms, UBS and Morgan Stanley.  These brokers are tightly grouped with trading shares of 6.7–7.5%.

Options &Volatility Products –Japan: Approximately 6 out of 10 institutions active in Japanese options and volatility products use Nomura Securities as an important broker. Next up are Morgan Stanley and Goldman Sachs, which are tied with market penetration scores of 52–54%, followed by Bank of America Merrill Lynch at 43% and the trio of J.P. Morgan, UBS and Deutsche Bank, which are statistically tied at 29–34%. The 2014 Greenwich Quality Leaders in Japanese Equity Options and Volatility Product Coverage are Goldman Sachs and Morgan Stanley.

Futures – Japan: With a market penetration score of 49%, Nomura Securities is once again the clear leader in this market, followed by a tight group of five brokers—Mitsubishi UFJ Morgan Stanley Securities, Mizuho Securities, Morgan Stanley, Daiwa Securities and Goldman Sachs—which are tied with market penetration scores of 31–34%.  The 2014 Greenwich Quality Leaders in Japanese Equity Futures are Mizuho Securities and Morgan Stanley.