No one yet knows quite what to make of Nomura Securities Co.’s new high-speed equity trading platform, launched in Hong Kong in late February by the Japanese brokerage house. A quick search of Tokyo-based financial sector analysts found only one — Azuma Ohno of Credit Suisse — up to speed on the Nomura offering, an algorithmic trading platform called ModelEx.
The rollout is intended to provide Nomura entrée into a field where it has yet to distinguish itself, and it builds on some of the remains of Lehman Brothers Holdings. The move is an aggressive play against Barclays Capital, which divvied up the overseas Lehman spoils with Nomura after the investment bank filed for bankruptcy last September.
Ohno says BarCap, the investment banking arm of London-based Barclays, asked to share Nomura’s patent on ModelEx but was refused. “Nomura wants to differentiate itself from its rivals,” Ohno notes.
A battle royal has been going on between the two firms in recent months in Tokyo, with each seeking to outdo the other by hiring fresh droves of bankers, mainly talented ex-Lehman people. Barclays confirms it has brought in 100 new staffers.
BarCap is building up its equities research business in Tokyo, more or less from scratch, even though the Tokyo Stock Exchange has been weak again this year, with the Nikkei 225 at one point approaching the 7,000 mark. Still, the U.K. bank is acting as if Japanese equities are about to take off.
Nomura seems more interested in developing its presence in Asia. The firm will offer its new platform in India, Korea and Taiwan sometime this month and is inviting everyone to the party. “We are well positioned to offer our services to long-only clients, hedge funds and pension funds,” says Hong Kong–based Rob Laible, head of Nomura’s electronic trading services in Asia.
ModelEx is not an entirely original creation of Nomura’s. It incorporates high-speed features developed by Lehman for big hedge fund clients and is the first fruit of Nomura’s $2 billion stake in what Lehman put on the auction block in Europe, India and the Far East.
