Daiwa Securities Co Ltd of Tokyo plans to open a new Canadian company after a June 30 deregulation of the Ontario equity market is implemented Daiwa Securities general manager for Canada Hajimu Watanabe tolds in reply to query. The Toronto Stock Exchange earlier announced Daiwa became the first Japanese company to acquire an exchange seat paying 361000 Canadian dlrs the highest price ever paid. This is a prelude of our establishment of a new Canadian company Watanabe said. Watanabe said Daiwas new Canadian brokerage house will concentrate on investment in Canadian stocks by Japanese investors Canadians acquiring Japanese equity and government and corporate financing mainly in the Canadian bond market. We have now a huge amount of demand on the part of Japanese investors for Canadian stocks Watanabe said. So if we can get membership of the Toronto Stock Exchange that should support our business very much he added. Daiwas application for exchange membership is subject to approval by other members and the Ontario Securities Commission. When asked Watanabe declined to specify how much capital Daiwa the worlds second largest investment dealer would invest in its Canadian subsidiary. It is quite confidential at this moment but say our main intention is not to create any friction with the Canadian houses Watanabe said. He said Daiwa could easily set up its new unit with one billion Canadian dlrs of capital but we are starting at quite a moderate figure. But small means quite big in Canadian terms he added. Daiwa which established a representative office in Canada in 1980 is ready to open its Canadian house as soon as Ontario security deregulation is implemented on June 30 Watanabe said adding Daiwa is very pleased with its reception by Canadian regulatory authorities. Watanabe said about 10 pct of Japanese investment in foreign securities goes to Canada ranking second to the United States which receives about 50 pct. The Japanese institutional investors feel that it is rather risky to concentrate around the 50 pct in one country he said. Japanese institutional investors are trying to diversify to other non-American vehicles and there are very few candidates that remain safe investment objects Daiwas Watanabe added. Investors in Japan are also feeling it is risky to concentrate in fixed income paper and are looking more towards investment in paper equity and real estate. So investment in Canadian paper especially Canadian equity should have a great future Watanabe said.
DAIWA SECURITIES TO OPEN CANADIAN HOUSE