Japanese Brokerages See Results Worsen

Daiwa Securities, Japan's second-largest brokerage, plans to transform itself into a holding company in April and slash 3,000 jobs, or 20% of its work force, over two years. The brokerage made the announcement as it reported a 94.6% drop in earnings to $3.3 million for the first nine months of its fiscal year. Nomura Securities, Japan's largest securities house, and Nikko Securities also reported disappointing results for the April-December period as emerging markets wallowed and collapsing bond prices eroded profits on fixed-income products. Nomura's profit fell 34% to $124.6 million. Nikko recorded a loss of $23.3 million, compared with a loss of $129.5 million a year ago. Nikko said it will reduce its work force as about 600 people are transferred to a wholesale unit to be established Jan. 29 with Citigroup's Salomon Smith Barney securities unit. Daiwa will make the move to a holding company after it transfers part of its operations to a wholesale joint venture to be established with Sumitomo Bank. Overseas operations will initially be brought under the holding company and later transferred to the joint venture.