logo
Nomura's China losses narrow as brokerage seeks turnaround

Nomura's China losses narrow as brokerage seeks turnaround

Business Times30-04-2025

[NEW YORK] Nomura Holdings posted a smaller loss at its joint venture in China last year, as the brokerage seeks to turn around the business in the face of slowing growth and trade tensions.
Net loss at Shanghai-based Nomura Orient International Securities narrowed 30 per cent to 128.7 million yuan (S$23 million) in the year ended Dec 31, a statement showed this week, marking the second straight year of improvement.
Nomura's majority-owned venture with Oriental International (Holding) and Shanghai Huangpu Investment Holding (Group) has continued to lose money since its inception in late 2019. Despite last year's improvement, credit impairment losses more than doubled, it said.
The unit has been undergoing an overhaul after its initial ambition to grow the wealth management business veered off track during the pandemic. It has shifted its priority to expanding in areas including research and trading, while it is seeking a new chief executive officer, Bloomberg reported this month.
The venture said it expects China's economic growth to slow this year as exports come under pressure from the Trump administration's trade policies. It will seek to generate stable and positive returns from proprietary trading in anticipation of more monetary easing in China, according to the statement.
'We continue to work with our JV partners to make our business in China profitable,' Nomura said in a statement, declining to comment further.
Headcount at the venture fell to 208 last year from 246 a year earlier. When it started, the firm had targeted raising its employee numbers to 500 by 2023.
China makes up a relatively small part of Tokyo-based Nomura's international business, even as Asia's largest economy was once a pillar of the firm's growth strategy. Chief executive officer Kentaro Okuda instead identified India and the Middle East as growth regions in a presentation released about a year ago, without mentioning China.
Nomura's losses in China contrast with profits for the broader Asia region. Pretax profit from Asia and Oceania, excluding Japan, more than doubled to 52 billion yen in the 12 months ended Dec 31, according to filings. BLOOMBERG

Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Oil Prices Hit 7-Week High on US-China Trade Optimism and Tightening of Supplies
Oil Prices Hit 7-Week High on US-China Trade Optimism and Tightening of Supplies

International Business Times

time2 hours ago

  • International Business Times

Oil Prices Hit 7-Week High on US-China Trade Optimism and Tightening of Supplies

Oil prices rose to nearly their highest level in two months on Wednesday. The rally followed news that U.S. President Donald Trump had confirmed that an agreement had been reached with China on a trade deal, awaiting the sign-off by leaders of the two countries. The development raised hopes of reducing tensions between the world's two biggest economies, lifting expectations for increased oil demand. Brent crude rose $1.15, or 1.7%, to $68.02 a barrel at 12:49 GMT. U.S. West Texas Intermediate (WTI) climbed $1.31, or 2%, to $66.29, its highest since early April. Market analysts say the trade deal helps cap a key downside risk to oil markets, at least for now. But there remains some cloudiness, since it is unclear how the deal will affect overall economic growth and energy use over the long term. Meanwhile, the complexities were increased by geopolitical tensions with Iran. President Trump said he was skeptical that Iran would agree to stop enriching uranium as part of a nuclear deal. Iran has, in turn, warned of military retaliation should talks fail. Those tensions are also helping to keep Iranian oil supplies constrained by American sanctions. Meantime, OPEC+ is poised to raise output by 411,000 barrels a day next month. The reduction is part of their strategy to gradually release output cuts for a fourth consecutive month. Still, internal demand in oil-exporting countries, including Saudi Arabia, may capture a lot of the increased supply, providing some floor to global prices. That echoed some economic signals in the United States. Consumer inflation grew less than expected in May, which supported speculation that the Federal Reserve could cut interest rates by September. The reduced interest rate discourages saving and encourages borrowing—both things that might accelerate economic activity and lift energy consumption. Oil inventory stats in the U.S. are awaited as one of the key near-term drivers. Early estimates indicate that crude inventories dropped by 370,000 barrels last week, a decline that, if borne out in official data, could further tighten the market.

Nearly 1 in 2 business leaders in S'pore ready to tackle geopolitical and other challenges: Report
Nearly 1 in 2 business leaders in S'pore ready to tackle geopolitical and other challenges: Report

Straits Times

time3 hours ago

  • Straits Times

Nearly 1 in 2 business leaders in S'pore ready to tackle geopolitical and other challenges: Report

Kroll surveyed 1,200 C-suite executives from more than 20 markets including the United States, Britain, Hong Kong and Singapore in February. PHOTO: LIANHE ZAOBAO Nearly 1 in 2 business leaders in S'pore ready to tackle geopolitical and other challenges: Report SINGAPORE – Business leaders in Singapore are among the most confident globally about their level of business preparedness when it comes to dealing with challenges ranging from geopolitical tensions to cyber-security threats and developments in the artificial intelligence (AI) space. In its first edition of the Business Sentiment Report, global risk and financial advisory firm Kroll found that 48 per cent of respondents in Singapore were 'very prepared' to face the challenges. This is higher than the 34 per cent in the Asia-Pacific region and 38 per cent globally. Kroll surveyed 1,200 C-suite executives from more than 20 markets such as the US, Britain , Hong Kong and Singapore in February . About one-third of all those surveyed work in the financial services industry, and more than one-fifth are in technology companies. The report highlighted geopolitical tensions, such as tariffs, as one of the most significant business challenges facing organisations over the coming year. The survey was conducted before US President Donald Trump slapped 'Liberation Day' tariffs on economies on April 2, which he then put on hold as he strikes trade deals with different nations. Singapore runs a goods trade deficit of US$2 .8 billion (S$3.6 billion) with the US, according to data from the Office of the United States Trade Representative. This means that the Republic imports more goods than it exports. As a result, businesses here would not have expected to be slapped with tariffs, said Mr Joshua Tucker, senior geopolitical adviser at Kroll. Singapore was hit by a baseline tariff of 10 per cent. Mr Tucker said business leaders here were probably a bit too optimistic about their ability to predict the US policy on tariffs. The survey had found that 22 per cent of Singapore business leaders identified geopolitical tension as a significant business concern, compared with 33 per cent globally and 28 per cent in the Asia-Pacific. Insead economics and political science professor Pushan Dutt believes business sentiment should have since shifted substantially after the imposition of the tariffs. 'One school of thought is that we will live in a Taco (Trump Always Chickens Out) world – that his bark is worse than his bite and he always backs off. However, what Trump has induced in the global economy is uncertainty,' he said. He explained that Taco-like behaviour increases uncertainty as firms and political leaders will not be able to ascertain how long the tariffs will be imposed for, if and when they will be lifted and how the conditions and types of tariffs could evolve. 'We should distinguish between risk and uncertainty – the first is about known unknowns and the second is about unknown unknowns. We have been catapulted into a world of uncertainty and should not live in denial,' he added. Mr Tucker said that while tariffs, like other direct business costs, can be factored into decision-making, there are other indirect costs stemming from uncertainty over the US tariff policy. If businesses do not know what tariffs will be in 30 days, six months or a year, they will not be able to plan ahead to mitigate the effects of tariffs . They may thus be less willing to take large risks, make acquisitions or enter new markets, he added. Mr Nick Baker, co-lead for trade and customs at Kroll, said companies risk falling into 'analysis paralysis', where they are constantly reassessing strategies but not taking action to implement their plans. Mr Tucker noted that Singapore is heavily dependent on trade with other economies. The 10 per cent baseline tariff on the Republic , as well as higher tariffs on neighbouring economies, could thus have an 'outsized economic impact on businesses'. Kroll stated in its report that whether companies can weather the 'economic and geopolitical upheaval' will depend on their underlying financial health. Singapore companies scored relatively well on this front, with 20 per cent of business leaders here saying they have full confidence in their companies' financial health, versus 9 per cent of respondents in the Asia-Pacific and globally. Ms Annabelle Cai, managing director in the restructuring practice at Kroll, said 'strategic measures' announced in Singapore's Budget 2025, such as the 50 per cent corporate tax rebate, enhanced wage support for lower-income workers, and more funding support for firms to make AI investments, will help firms to manage rising costs and drive sustainable growth. A stable government and business-friendly environment contribute to business confidence in Singapore, Ms Cai added. On the whole, Dr Huynh Bao Tan, senior lecturer of economics at the Singapore Management University, stresses that while Singapore is impacted by the imposition of the tariffs, the 10 per cent levy is imposed across the board, and hence will likely have minimal impact on Singapore's relative competitiveness overall. 'Overall, I wouldn't be surprised if businesses' sentiment has dropped a little (from the time the survey was conducted), but I'm not really expecting things to have changed much,' he said. 'Markets seem quite hopeful that there'll be good outcomes regarding the trade negotiations,' he added, referring to the US trade talks with China as well as the European Union. Additional reporting by Megan Wee Join ST's Telegram channel and get the latest breaking news delivered to you.

Jetstar Asia's exit shrinks options for consumers, but unlikely to dent Changi's hub status
Jetstar Asia's exit shrinks options for consumers, but unlikely to dent Changi's hub status

Straits Times

time6 hours ago

  • Straits Times

Jetstar Asia's exit shrinks options for consumers, but unlikely to dent Changi's hub status

News analysis Jetstar Asia's exit shrinks options for consumers, but unlikely to dent Changi's hub status SINGAPORE – Jetstar Asia's impending exit after more than two decades in Singapore is a blow to budget-conscious travellers, even if the low-cost airline's modest 3 per cent share of Changi Airport's traffic might suggest otherwise. Although Changi remains well-served by other budget carriers on busy routes such as Bali and Jakarta, Jetstar Asia's departure will sever non-stop links to four emerging holiday spots. The Singapore offshoot of Australia's Jetstar – which began operations in December 2004 – is the only airline that serves Okinawa in Japan, Wuxi in China , Labuan Bajo in Indonesia and Broome in Australia from Changi. While Changi Airport Group (CAG) has said it would work with other airlines to restore connectivity , the prospect of losing non-stop connections to these cities comes at a time when Singapore is looking to aggressively expand the number of destinations linked to Changi. The airport is connected to about 170 cities worldwide, and the target is to surpass 200 cities by the mid-2030s, when Terminal 5 opens. Maintaining as many air links as possible is good for airlines and consumers, especially when low fares are in the mix. This also strengthens Changi's competitiveness as a transit hub. Jetstar Asia, which is 49 per cent owned by Australia's Qantas and 51 per cent by Singapore company Westbrook Investments, cited higher airport fees and aviation charges, as well as intensifying competition, as reasons it had become unsustainable to continue operations at Changi. Mr Linus Benjamin Bauer, founder and managing director of aviation consultancy BAA & Partners, said rising costs are squeezing low-cost carriers. 'Many airlines still operate under pre-pandemic pricing models, but face a vastly more expensive cost base,' he said, adding that more exits or mergers, especially among smaller budget airlines, can be expected. The writing had been on the wall for some time for Jetstar Asia. It was the slowest of the three Singapore-based carriers – the others being Singapore Airlines (SIA) and its budget arm Scoot – to rebound from the Covid-19 pandemic. Its fleet of 13 Airbus A320 aircraft is down from 18 before the pandemic. Its move from Changi's Terminal 1 to Terminal 4 in March 2023 – which the airline protested publicly – also lengthened connecting times for passengers transferring to Qantas or its partner airlines. T4 is a distance from T1, where Qantas operates, for instance. When Singapore announced its latest round of airport fee hikes in November 2024 to fund improvements to Changi Airport and defray rising costs , Jetstar Asia had warned the increases would have an impact on its ability to offer low fares. It also noted that most of CAG's planned upgrades do not apply to T4, where it operates. Under the new fee structure, landing, parking and aerobridge charges for narrow-body jets such as the A320 will rise yearly, climbing from about $1,200 per landing before April 2025 to $1,725 in April 2030. Passenger fees will also go up in stages until the end of the decade. Passenger fees at Changi are already steeper than those in regional hubs such as Bangkok. While such costs are seen as necessary to help airports fund infrastructural improvements to meet future demand, the increases have made it increasingly difficult for low-cost carriers such as Jetstar Asia to keep air fares low – their key selling point – without passing the extra costs on to customers. 'Singapore has become a high-cost environment for a low-cost carrier, and Qantas Group and Jetstar feel they can get better returns on their assets in other markets,' said Mr Mayur Patel, Asia head at consultancy OAG Aviation. It does not help that in some cases, full-service carriers such as SIA can also offer low fares if tickets are booked early. This is because they have the flexibility of deploying wide-body or narrow-body aircraft, depending on demand. After its closure, Jetstar Asia's 13 planes will be redeployed progressively across the Qantas Group to support fleet renewal and growth in Australia and New Zealand in line with demand. The low-cost airline's closure comes as global demand for air travel remains strong. Airlines are expected to fly a record 4.99 billion passengers in 2025 – a 4 per cent increase from 2024 – according to the latest forecast from the International Air Transport Association. The Asia-Pacific region is driving this growth. So why has Jetstar Asia struggled to take advantage of this? This has partly to do with the intensity of competition on seven of the 16 routes that it serves, which are operated by at least three other airlines, data compiled by Mr Patel showed. Singapore-Bali is served by nine airlines including Jetstar Asia, Singapore-Jakarta by eight, and Singapore-Kuala Lumpur by seven. Even fellow low-cost carrier AirAsia has scaled back on some routes of late, likely due in part to higher operating costs. It dropped its Singapore-Ipoh and Singapore-Phuket services, and cut back flights to Bangkok's Don Mueang Airport earlier in 2025. Jetstar Asia's exit leaves SIA and Scoot as the only Singapore-based carriers. While consumers will have one less option, choices still abound, with one-fifth of the 100 airlines at Changi being low-cost carriers. Overall, they serve more than half of the 170 cities that the airport is connected to. Mr Patel said any connectivity gaps left by Jetstar Asia's exit can be filled only in the short to medium term by other carriers. This is due to delays in the delivery of new aircraft and the time needed for capacity changes. Ultimately, Jetstar Asia's withdrawal from Singapore will shrink the choices available to consumers, particularly those eyeing the non-stop links it served exclusively. But its limited market share means that the impact on Changi's standing as a hub will likely be minimal. Kenneth Cheng is assistant news editor at The Straits Times. He oversees transport coverage, spanning the land transport, aviation and maritime sectors. Join ST's WhatsApp Channel and get the latest news and must-reads.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into the world of global news and events? Download our app today from your preferred app store and start exploring.
app-storeplay-store