Japanese investment bank, Daiwa Securities (TYO:8601) and the biggest forex broker by monthly volume in the world, GMO Click Holdings (TYO:7177) have executed a Memorandum of understanding agreement. Under its terms the companies will form a business alliance with Daiwa Securities acquiring part of the stake of GMO Internet in GMO Click.
With prospects for low interest rates to remain in place for the foreseeable future, Daiwa Securities (TYO:8601) has refocused its attention on expanding its business to retail investors. The medium term management plan of the investment bank which encompasses the three years until fiscal 2017 is to make use of the transition from savings to investment.
Daiwa Securities will purchase 11,100,000 shares from the biggest shareholder, GMO Internet
The culture of Japanese savings has remained unscathed for years, even despite low interest rates. The introduction of the quantitative and qualitative easing program by the Bank of Japan which aims to prop up asset prices, is playing out to the advantage of brokers who will benefit from increasing market activity.
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Daiwa Securities (TYO:8601) and GMO Click plan to work together and make financial trading services even more attractive to clients. Combined together, the solid business foundation of the investment bank and its experience in the securities business will synergize with the capability of GMO Click to develop systems independently and its strong online marketing capability.
Daiwa Securities and GMO Click are contemplating to develop a new FX and securities trading service
The agreement details that Daiwa Securities (TYO:8601) and GMO Click (TYO:7177) are contemplating to develop a new FX and securities trading service combining the strengths of both companies. More information about the venture should become available by the end of March 2016.
Daiwa Securities (TYO:8601) will purchase 11,100,000 shares which represents a 9.6 percent stake in GMO Click from GMO Internet. The investment bank may acquire up to 20 percent of the outstanding shares of the Japanese brokerage in the future, depending on the progress of the business alliance.