As you always said Jap financial instituions are going to arrive big time in commodities

beleive it!! endorsement!
---------- Forwarded message ----------
From: anindya banerjee
Date: Feb 10, 2009 8:31 PM
Subject: As you always said Jap financial instituions are going to arrive big time in commodities
To: dinesh goel

INTERVIEW-Nomura sees growth in Japan commodities business
by Reuters News on 09 February 2009, 10:35 AM

TOKYO, Feb 9 (Reuters) - Nomura Securities Co. <8604.T> sees opportunity in the travails of its foreign rivals as it looks to double its commodity business in Japan this year.

The country's top brokerage hopes to step up its commodities business as global rivals such as Goldman Sachs and Morgan Stanley scale back in response to global financial turmoil.

"Our team has now become more accustomed to commodity trading and that has come at a time of receding presence of other players including foreign firms, so the business environment is better than before," Masahiko Kamio, the head of the company's trading team, told Reuters on Monday.

Nomura's commodity trading team, set up in April 2008 at the height of the commodities boom, handled 50 to 60 deals in January, he said.

This is up sharply from just several cases per month at the start, and Nomura wants to boost the number to 90 or so by the end of 2009.

A total of 16 people are involved in Nomura's commodity business, including nine in the trading team under Kamio, two in research and five in sales, and the company plans to keep the staffing more or less steady for now, Kamio said.

"There are always hedging needs by clients to fix the cost, regardless of market conditions," Kamio said, adding that Nomura currently deals with about 10 big-name Japanese clients, including trading firms, transport and manufacturing companies.

About 90 percent of its commodity business is hedging, of which half relates to the oil market and the other half to base metals. Hedging deals involve among others jet fuels and crack spreads between crude oil and oil products, as well as copper dealings, Kamio added.

Interest from Japanese clients has been on the rise, he said, as investors take into account the yen's strength and oil prices trading well below their peak.

"We have many inquiries about commodities from investors recently, such as whether there is anything interesting linked to the oil market."

Rather than boosting the number of staff involved, Nomura wants to spread commodity knowledge to regular sales staff so they can deal with client needs at its branches.

"That way, we can expand our client base," Kamio said.

The face value of Japanese commodity funds sold by brokerages fell 2.7 percent in December from the previous month to a record low of 21.4 billion yen ($233.7 million), the 16th straight monthly decline, according to a recent data by the Japan Commodities Fund Association.

Kamio also said the company planned to develop commodity-linked investment products, but stopped short of specifics.

"Pension funds are showing interest and we are also getting inquiries from asset management firms," Kamio said.

Commodity-linked trading currently accounts for less than five percent of overall trading earnings, and the company aims to double that to nearly 10 percent by the end of the year, he said.

Nomura posted a record $3.8 billion quarterly loss, hit by costs related to buying Lehman Brothers' operations, soured trades and exposure to Iceland and accused swindler Bernard Madoff. ($1=91.57 Yen) (Editing by Michael Urquhart)

Regards,
Anindya Banerjee.