Markets Business Powers Nomura’s Engine in Asia

Global financial services group Nomura has been forging ahead in Asia. What is driving its success? Top executives speak about Nomura’s growth, accomplishments and expansion plans across the region.

For Nomura, with a presence in 12 markets across Asia ex-Japan and supported by a talent pool of over 6,500 employees in the region, Global Markets has been a growth area, contributing significantly to the firm’s profitability over the past decade. 

“Despite heightened volatility in the past year, our business performance in the region has remained robust,” said Rig Karkhanis, deputy head of Global Markets and head of that business in Asia ex-Japan. “The client franchise has been built through a long pedigree of innovation, be it as the first house to market Arirang bonds in South Korea, or among the pioneers of Formosa bonds in Taiwan.”

“One of our key franchise strengths across asset classes is the risk solutions we provide to our institutional clients, especially in developed markets such as Singapore, Hong Kong, Taiwan and South Korea,” added Mr. Karkhanis.

These tailored structured solutions have contributed to Nomura being recognized as GlobalCapital’s Interest Rates Derivatives House of the Year – Europe and Asia for the second straight year in 2022.

In line with its dual-hub strategy for Asia ex-Japan, FX, rates and emerging markets are run out of Singapore, while credit and equities are run from Hong Kong.

“As a global financial services group, we are fully committed to supporting Singapore’s development as a major global FX hub,” said Mr. Karkhanis, who also oversees Nomura’s global FX and emerging markets business from the city-state. This unit has been bringing in new talent and upgrading infrastructure to gain market share and add to its leading position in FX options and emerging markets linear rates.

These businesses are complemented by a well-recognized macro research team. Sonal Varma, Nomura’s chief economist for Asia ex-Japan, was ranked No. 1 by The Asset for pan-Asia research last year for best individuals in Asian local currency bonds, climbing from No. 2 in 2021 and No. 3 in 2020. Her colleagues, Rob Subbaraman, head of global macro research, and Ting Lu, chief China economist, were among the top 20 economists in the same publication’s 2022 poll of the best individuals in Asian G3 bonds. Many of Nomura’s equity research analysts are also ranked highly by Institutional Investor.

Nomura’s flow credit business in Asia ex-Japan also commands a leading position, ranking No. 2 by revenue share in Asia ex-Japan, according to an analysis by Coalition Greenwich. That’s down to a strong bench of traders, analysts and salespeople. One of its credit traders and a credit analyst were ranked in the Top 2 in The Asset’s best individuals in Asian G3 bonds in 2022. Three other credit analysts and five credit sales team members also featured in the top 20.

Meanwhile, Nomura’s equities business is a growth area for the firm, in line with its global equities buildout.

For China, while Nomura has been building its presence onshore through a majority-owned securities joint venture, it has also built a China sales team within Global Markets in Hong Kong and Singapore. The firm’s Singapore entity last year became one of the offshore FX dealers approved to provide G10 FX pricing on the China Foreign Exchange Trade System, the country’s official interbank FX trading system.

As part of efforts to expand its capabilities beyond public markets, Nomura identified private markets as an area of growth in mid-2020.

“Under Global Markets, we have developed a private credit business in Asia ex-Japan, providing solutions across the capital structure ranging from senior to subordinated and mezzanine debt,” said Mr. Karkhanis.

And finally, Nomura’s International Wealth Management business also rolls up into Global Markets.

“The alignment helps it provide its high-networth clients with similarly sophisticated products and services as those by Global Markets to its institutional clients. The division’s relationship managers, aided by strong synergies with Global Markets, have made significant progress in accumulating wealth management assets over the past two years,” said Mr. Karkhanis.

Nomura Doubles Down on Wealth Management with Dubai Expansion

Nomura has also received approval to open a branch in Dubai to fast-track the expansion of its International Wealth Management business and complement its existing strategy of serving clients in Asia ex-Japan from Singapore and Hong Kong.

Nomura’s International Wealth Management (IWM) business targets clients in Greater China, Southeast Asia, the Middle East, and the global Non-Resident Indians segment, all currently served by around 90 private bankers in Singapore and Hong Kong. The establishment of the Dubai International Financial Centre branch of Nomura’s Singapore entity is a key initiative that will help it expand the footprint of its relationship managers.

Plans are afoot to initially hire 5-10 private bankers there to grow the franchise, targeting high-net-worth clients with investable assets of at least $25 million. The execution and booking of client assets will continue into Singapore.

“Dubai has long established its importance in the Middle East, Indian subcontinent and Africa for entrepreneurs and families as a base to grow their international presence from. We welcome the chance to be a part of this exciting growth opportunity to offer our International Wealth Management and one-bank solutions to clients via our robust platform,” said Ravi Raju, Head of International Wealth Management, Nomura.

International Wealth Management Buildout

In April 2020, Nomura’s wealth management business was aligned with its Global Markets business under the Wholesale division. The goal was to provide a more holistic product suite to clients through a one-bank approach.

“Our clients, who often are entrepreneurs themselves, are increasingly demanding institutional-level products and services. We felt we could better serve our client needs by integrating into Wholesale where we can provide the institutional product suite and bespoke structuring and financing solutions,” said Mr. Raju, who joined the firm in September 2020.

Today, IWM offers everything from deposits to cash alternatives, and access to equity, fixed income, foreign exchange, structured products and derivatives. In addition, managed products offered to clients now consist of mutual funds, hedge funds, exchange traded funds and private equity. The business has also significantly enhanced its suite of lending solutions.

IWM has also built its investment office, which additionally runs discretionary portfolio mandates on behalf of clients, fully integrating research and financial advisory capabilities from the wider Nomura group.

Clients can access wealth planning solutions through Nomura Trust services in Singapore, thereby completing the full suite of wealth creation, wealth management and wealth transfer solutions.

Since late 2020, Nomura IWM has opened a record 1,000 new client accounts and added more than $5.5 billion in net new money, further cementing its position as a leading wealth manager in the region.

“We have made significant strides in formulating and executing our IWM buildout plan over the past two years. Our progress has been robust, with the firm making meaningful investments in people, infrastructure and digital capabilities to transform the platform,” said Mr. Raju.

Asia remains the fastest growing region for wealth creation, driven by the number of entrepreneurs and family enterprises generating new wealth.

Looking ahead, the medium term plan is to have about 110-120+ relationship managers across the three centers of Singapore, Hong Kong and Dubai, and double assets under management from current levels of $13.5 billion.