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Burgeoning Principal Investments Spur Japan's Securities Companies To Bolster Risk Management Aug 06
Standard & Poors, Aug 2006
Abstract
With the expansion of private equity and M&As in the Japanese market, the major securities houses are increasingly using their own funds for investment, mainly through subsidiaries. Liquidity in these investments tends to be low, and targets are varied, including M&As, corporate buyouts, and capital injections into mature companies. An antimonopoly law prohibited investors from holding more than 51% of a company until 1977, meaning that the domestic private equity market has a relatively short history. With a lack of historical performance data, it is difficult to calculate investment risk size. Moreover, concentration risk held by the major securities companies is increasing due to the expansion of large investments. Standard & Poor's Ratings Services believes that risks associated with principal...
Companies mentioned in this report are: Daiwa Securities Group Inc.,Nomura Securities Co. Ltd.,Daiwa Securities Capital Markets Co. Ltd.,Daiwa Securities Co. Ltd.,Nomura Holdings Inc.,Citigroup Overseas Holdings Inc.,Nikko Cordial Corp.
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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