UPDATE 2-Nomura to launch full-scale operations in India

(Adds comment, details, background)

By Sachi Izumi

TOKYO, July 18 (Reuters) - Japanese brokerage Nomura Holdings (8604.T: Quote, Profile, Research) said on Friday it would launch full-scale operations in India, expanding into stock trading and asset management to tap demand in the fast-growing country.

Japanese securities houses are seeking growth overseas given a mature economy and shrinking population at home. Nomura's annoucement came a day after a tie-up announcement between Daiwa Securities Group Inc (8601.T: Quote, Profile, Research) and Brazil's Banco Itau (ITAU4.SA: Quote, Profile, Research). [ID:nT241935]

In India, however, industry leader Nomura is lagging behind its domestic rivals. Second-ranked Daiwa already operates there, while Mitsubishi UFJ Securities, a unit of Mitsubishi UFJ Financial Group (8306.T: Quote, Profile, Research), has a local subsidiary and an alliance with ICICI Bank (ICBK.BO: Quote, Profile, Research).

"This is a welcome development for Japanese investors," said Yuuki Sakurai, general manager of financial and investment planning at Fukoku Mutual Life Insurance Co.

"Japanese brokerage firms can be the bridge when Indian companies want to raise funds in Japan and when Japanese investors want to access India," he said. "They have good knowledge about what Japanese investors want."

Expansion in India supports Nomura's aim to more than double annual revenue in Asian markets outside Japan in five years, as revenue from the region still accounts for a tiny part of its overall income.

The plan follows a failed attempt to take a stake in Indian financial services group Enam last year.