Daiwa expands derivatives offering

Published: July 6, 2010

Japanese bank to buy KBC businesses.

Daiwa Capital Markets, the investment banking arm of Japanese brokerage and financial services company Daiwa Securities, has agreed to buy the global convertible bonds and Asian equity derivatives businesses of Belgium’s KBC Group.

The deal, if granted regulatory approval, would be worth some US$1bn and is part of the company’s strategy to build a global derivatives offering.

The global convertible bonds business, which operates from offices in Hong Kong, London and New York, offers secondary market services for issuers and investors in the international convertible bonds market, counting some 350 clients in 25 countries.

The Asian derivatives business provides market-making services in the listed Hong Kong warrants market and generates customer flow business from the issuance of equity-linked notes and over-the-counter derivatives based on the equity of Asian companies.

The target businesses will sit within Daiwa’s Global Derivatives operation, headed by Dominique Blanchard. He says this acquisition accelerates the group’s development in areas it has planned to build in the coming years.