Nomura explores China market via FTZ venture

The Japanese investment bank is the first non-Chinese securities house to provide overseas products and advice within the Shanghai free-trade zone.

Nomura has moved to enhance its presence in mainland China by setting up a joint venture in the China (Shanghai) Pilot Free Trade Zone.

The Japanese investment bank has signed a joint venture agreement with related parties of state-owned developer and financial group Shanghai Lujiazui Development (Group), as well as Shanghai Jiu You Equity Investment Fund Management.

Nomura will hold 60% of the JV - called Shanghai Nomura Lujiazui Investment Management - and will register in the FTZ, according to an announcement on Monday.   

The JV will not target retail investors directly but will provide information regarding the financial markets and foreign products to branches of financial institutions in the FTZ, according to a source familiar with the situation.

Those institutions, as potential clients of the JV, have offered investment advice and products to high-net-worth individual clients via their own networks.

The move is expected to help Nomura seize market opportunities in the FTZ – the bank will be the first non-Chinese securities company to provide services from the overseas markets. It will also offer the bank more opportunities to gain businesses from the increasing rich in the country.

The move comes as Nomura hired Wendy Liu from RBS to manage its China equity research products in 2012 and last August added Stanley Wong as head of North Asia equity distribution to strengthen equity and derivatives sales in Hong Kong, China, Taiwan and Korea.

Meanwhile, the Shanghai FTZ, the Petri dish for China’s attempts at market reforms, will provide more investment chances for foreign companies.

As of end-March, the zone has attracted 661 foreign enterprises that have registered for business since it officially launched last September, according to the zone’s official website.

The government recently unveiled rules that will further open up the country’s telecom sector and allow foreign companies based in the FTZ to invest in value-added telecom services. 


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