Nomura Holdings Inc expects its new online venture Joinvest Securities Co to handle trades worth 4 trillion yen ($34 billion) a month by March 2007, Joinvest president Masaki Fukui said on March 29.
Nomura, Japan's biggest securities brokerage, had not previously revealed its target for trading value, a figure that can provide insights into the kinds of clients it is chasing in the fast-growing Internet broking business.
Nomura said last week it hoped Joinvest would attract 500,000 account-holding clients in the first 10 months following its planned launch in May and turn a profit by the following year.
Its latest disclosure points to an expected monthly trade value per client of 8 million yen ($68,000), a level equal to or slightly below that of other online brokers, which offer steep discounts and attract less wealthy clients than their brick-and-mortar rivals.
Joinvest's expected trade volume would put it on a par with Matsui Securities Co Ltd and Rakuten Securities, the second- and third-biggest online brokers by market share.
Japan's biggest Internet broker, E*Trade Securities Co Ltd, handles about 10 trillion yen worth of trades a month from 1.1 million clients.
Japan's longest economic expansion since the 1980s has drawn individual investors back to the market in force, helping push the Nikkei stock average up 40 percent last year. Retail investors account for 40 percent of the activity on Japan's exchanges, and they make four-fifths of their trades online.
Joinvest's volume target gives a clearer picture of its business model, which has been a subject of anxious speculation in the industry. Breaking with Nomura's image as a broker for the well-to-do, Joinvest will be competing for the same discount brokerage clients as its online rivals.
Joinvest has promised its fees will be among the lowest in the industry, though it has yet to give details.
Of the forecast 4 trillion yen in monthly trades, Fukui said he expected about 2.5 trillion would be generated though margin trading, a lucrative source of income for online brokers.
Nomura has chosen not to put its name on the Joinvest venture, a decision that likely reflects managers' worries that an aggressive push into online trading could draw customers away from existing higher-margin services.
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