Daiwa Securities Group plans to invest $1 billion to expand in the region, deputy president Takashi Hibino told a media briefing in Hong Kong last Thursday.
Daiwa, Japan's second largest brokerage, is aiming to become one of the top five brokers in Asia ex-Japan by 2012 and seeks a top-10 league table ranking for Asia ex-Japan investment banks by March 2013.
"We know that this is a bold target, but we are very committed to enter the Asian market and are taking every step seriously," said Hibino.
The group has decided to make Hong Kong its Asia headquarters for ex-Japan operations. It will focus on conducting primary and secondary offerings of H-shares (Hong Kong-listed shares of Chinese state-owned enterprises), as well as equity derivatives, such as listed warrants.
As part of the plan, four senior executives will be relocated to Hong Kong, including the head of global equity sales, the co-global head of investment banking and Hibino himself. And Daiwa has labelled 2010 "a year for hiring". The firm already hired 10 senior staff in Asia ex-Japan last year and Daiwa officials say they are planning to attract talent from other investment banks with competitive salaries and benefits.
"The applicants should be top-tier analysts, sales traders or bankers who are committed to contributing to the group's success," said Hiroyuki Nomura, president and chief executive officer of Daiwa Securities SMBC Hong Kong.
Under the current plan, Daiwa is expecting to boost its headcount from 650 to 1,120, which is an increase of slightly more than 70%. The 470 new hires will be spread across the front, middle and back offices. Among them, 200 hires will be for the Asian brokerage business, while another 100 will be on the Asian capital markets side.
M&A is an option
With its solid financial statements and a strong capital position, Daiwa is also seeking and reviewing targets for mergers and acquisitions to boost its presence across Asia.
"The [target's] corporate culture is an important consideration when we are making M&A decisions," said Hibino, declining to name any potential partners. However, he did say that during the past year, Daiwa has been approached by 60 Asian companies with regard to acquisition projects and the firm's leadership expects an acquisition will likely take place next year.
"The next decade will be a decade for Asian investment banks," said Hibino, adding: "I have just started to learn Mandarin last week."