Nomura extends key broker woes

HONG KONG, July 7 (Reuters Breakingviews) – Nomura’s (8604.T) shareholders are getting a flashback to March’s Archegos fiasco. The Japanese investment lender missing $2.9 billion from the U.S. fund’s implosion. Now it’s closing study far more areas of its primary-brokerage division that was at the centre of the mess – but not the genuine models accountable.

Up for the chop are the U.S and European units that deal in dollars stocks for hedge resources, Reuters and Bloomberg have the two documented. But it seems Nomura manager Kentaro Okuda is retaining the fairness derivatives functions which helped Archegos over-leverage alone.

Granted, the closures are small and will not materially have an affect on the bank’s bottom line. Still Nomura’s shares fell 1.4% on the news and are down nearly a quarter from pre-Archegos amounts. Income prime brokerage is fewer worthwhile than featuring shoppers inventory publicity by way of derivatives, but it is a lot less dangerous. The shares’ most recent drop implies buyers are not but assured that Nomura has thoroughly place its key-brokerage woes at the rear of it. (By Jennifer Hughes)

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