The largest contributor for the year was Daiwa Securities Group (TSE:8601), Japan’s second largest broker, returning 88%. Daiwa released its fiscal first-half results during the quarter that showed pre-tax profit at the highest level since the company started reporting in 1995. Revenues rose across the board in retail, wholesale and asset management, and in total they are on track to meet full-year estimates. Of special note, the wholesale banking division became profitable for the first time since 2009. We expected wholesale banking revenues to be strong due to equity trading and commission activity, but were surprised by the advance in fixed income revenues, which surpassed peers.
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From David Herro (Trades, Portfolio)’s fourth quarter 2013 commentary.
