The great sell-off of Japan’s cross-shareholdings has started and brokers are jockeying for a slice of the billions of dollars in fees at stake.
Nomura Holdings is offering clients bespoke ways to offload such stocks, while Daiwa Securities Group has added experts in what are known as block trades to a team that manages relationships with corporate customers. Bank of America is leaning on its network of global clients to help firms dispose of their holdings and Mitsubishi UFJ Morgan Stanley Securities is looking to staff up across equity financing.
Pressure from the government and investors to improve corporate governance is leading firms to whittle down the estimated ¥50 trillion ($320 billion) they hold in companies with which they do business. More than a thousand listed firms in Japan have recently promised to reduce such shareholdings, including marquee companies such as Toyota Motor. For brokerages handling the transactions, which include secondary offerings and block trades, the fees could reach $2 billion to $5 billion, according to Bloomberg Intelligence analyst Hideyasu Ban.