Daiwa to invest in Southeast Asian financial firms

Monday, Feb 22, 2016 10:00

Daiwa Securities Group will invest a total of nearly $177 million in a major Vietnamese securities company. — Photo gettyimages.co.uk

TOKYO — Daiwa Securities Group will invest a total of nearly 20 billion yen ($177 million) in a major Vietnamese securities company and a Malaysian investment bank, ramping up operations in a region expected to enjoy long-term growth.

The Japanese brokerage will spend several billion yen to boost its 10% stake in Saigon Securities to around 15%. This will make Vietnam's largest securities firm an equity-method subsidiary, giving Daiwa a greater say in management. The two companies entered into a capital and business tie-up back in 2007.

Hopes are high for Vietnam's economic growth, thanks partly to Hanoi's signing of the Trans-Pacific Partnership trade pact. Since the country has relaxed restrictions on foreign participation in securities markets, Daiwa will step up handling of Vietnamese stocks. The company also anticipates a growing appetite for Japanese stocks as the nation's upper class expands.

Daiwa will also buy into Malaysia's Affin Hwang Investment Bank, with an agreement likely to be reached as early as this month. The brokerage is expected to spend more than 10 billion yen for a roughly 20% interest.

Affin Hwang and Daiwa formed a business partnership in late 2013 and have had some success with such projects as supplying reports on Malaysian stocks to domestic and foreign institutional investors. The two companies plan to partner in investment banking, including advising on acquisitions and underwriting debt offerings.

Daiwa has a head start over Japanese rivals on reinforcing its Southeast Asian business. Its operations in Asia outside Japan continue to log pretax losses. But the company will continue teaming up with leading financial institutions in the region, expecting economic growth to promote the development of local securities markets. — Nikkei

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