Nomura Prime Finance – Best Asia Pacific ETF Market Maker

Nomura has been an active player in the global ETF market since the early 2000s, following its debut ETF launch on the Tokyo Stock Exchange in 2001. From that point, its business has to a large extent been underpinned by delivering Asia Pacific products to its global client base.

“Our platform provides additional liquidity and better pricing to our clients. More broadly, Nomura’s strength lies in the level of service, market access and coordination with the execution platform,” comments Stephane Redon (pictured), Head of Index and ETF Trading, Delta One, EMEA at Nomura.

Although Asia’s ETF market has not grown to the same extent as that of the US or Europe, there are nevertheless encouraging signs that activity is picking up. Last year, in Asia ex-Japan, China dominated ETF activity for both fixed income and equity products according to Laurent Poirot, Managing Director and Head of Prime Finance Trading, AEJ, Nomura. 

“The implementation of reforms remains a key theme in the market. A good example of the reform efforts was the successful launch of China Shanghai-Hong Kong Stock Connect scheme in the last quarter of 2014. This is a structural change that should contribute significantly to the growth to the ETF market in the coming years and reduce the cost of accessing Chinese securities. We can also expect broader diversification of proposed indexes and themes covered by asset managers,” explains Poirot. 

This increased level of activity in China, buoyed by the launch of the Stock Connect scheme, led to greater year-on-year trade volumes for Nomura thanks to the two-way flow of trading between China and Hong Kong. 

In Poirot’s opinion, ETFs have been, and will continue to be, an efficient tool to increase exposure to the market and suggests that India is also a market to watch closely. 

“Looking beyond a number of new launches last year, ETFs will be a good way for investors to get exposure to India as the financial system continues to modernise. China’s financial reforms and India will be a key driver of activity in the coming years across equities and fixed income,” says Poirot. 

Indeed, India already has already seen five new ETFs filed for registration with the regulator this year, the most recent being the SBI ETF 10-year Gilt on 9 March 2015, as reported by Business Standard on 10 March 2015. This shows the progress being made in India’s ETF market, all of which is good news for a leading market maker like Nomura. 

Susumu Nishibu, Head of Delta One Trading, Japan, notes that the leveraged ETF market was strong last year, with good growth in assets under management. 

“Our Nikkei leveraged ETF managed by Nomura Asset Management has been particularly successful and ranks in the global top 10 by daily turnover. We’ve also seen several smart beta ETFs and a variety of exchange traded notes listed, which are providing the market with new and exciting investing opportunities,” says Nishibu.

Redon says the strategic aim for Nomura in 2015 is to continue to be an active player as the evolution and growth of the ETF market continues, across both equities and fixed income. “Our strategy is focused around bringing together our global expertise to facilitate further growth, as well as designing the right investment tools for our clients,” states Redon.

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