January 30, 2020 / 1:02 AM / 25 days ago

Japan's Daiwa invests $128 mln in marketing company as stock fee shrinks - Nikkei

TOKYO, Jan 30 (Reuters) - Japan’s Daiwa Securities Group Inc will invest 14 billion yen ($128 million) in a marketing company Katana, the Nikkei reported on Thursday, aiming to diversify revenue sources as stock transaction fees are expected to shrink.

Katana was founded in 2017 by Tsuyoshi Morioka, who helped turn around Osaka-based entertainment park Universal Studios Japan, according to the company.

Daiwa will acquire new and existing shares in Katana, making the brokerage the leading shareholder but not a majority owner, the Nikkei said.

The move comes as Japanese securities firms including Daiwa have struggled with their sluggish retail business under volatile market conditions.

Daiwa posted a 83.1% decline in its retail division’s recurring profit during the three months through September, while Nomura, the country’s largest brokerage and investment bank, said its pretax income for the division dropped 57% in the same period.

The two companies said they would disclose the deal’s detail at a joint press conference at 0200 GMT on Friday.

Katana will pour about 10 billion yen from Daiwa’s investment to help small and midsize companies turn around, focusing on regional recreational facilities, restaurants and hotels, the Nikkei said.

$1 = 109.7000 yen Reporting by Takashi Umekawa; Editing by Stephen Coates

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