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Summary
- Stocks of Japanese financial services company Nomura Holdings Inc (TYO: 8604) shrank by about 16 per cent on Monday, March 29 (3PM GMT).
- It is reportedly their sharpest intraday fall since November 2011.
- This latest decline in price comes as the Tokyo Stock Exchange-listed stock recorded a deluge of sell orders as the markets opened earlier in the day.
Stocks of Japanese financial services company Nomura Holdings Inc (TYO: 8604) shrank by about 16 per cent on Monday, March 29 (3PM GMT), which is reportedly their sharpest intraday fall since November 2011.
This latest decline in price comes as the Tokyo Stock Exchange-listed stock recorded a deluge of sell orders as the markets opened earlier in the day.
Nomura’s American Depositary Shares (ADSs), which are listed on the New York Stock Exchange (NYSE) under the ticket of ‘NMR’, currently stand unchanged at US$ 6.61.
So, what caused Nomuro’s stocks to collapse on Monday? Let’s find out.
Nomura Holdings Inc (TYO: 8604)
Nomura Holdings Inc put out a statement on Monday saying that it may have suffered a “significant” loss due to some transactions with a US-based client.
©Kalkine Group 2021
The Japanese securities firm estimated a claim of about US$ 2 billion against the unnamed client, based on market prices as of Friday, March 26. It added that the numbers could change depending on how the transactions unfold further and market fluctuation.
At the moment, Nomuro is said to be in the process of reviewing the extent of the projected loss and its impact on the company’s financial results.
The Tokyo-headquartered firm put out the latest statement following a series of block trades in the US on Friday, which reportedly triggered dips in the stock prices of many companies.
©Kalkine Group 2021
While Nomuro has not revealed any names, sources quoted by some media reports hinted that its estimated loss could be linked to the trades of one of its top brokerage customers, capital market firm Archegos Capital Management.
Neither of the two companies have reportedly commented on the claims of their relationship.
Investors are always asked to conduct their own research before taking a call about a stock. The projected loss aside, Nomuro Holdings has been one of those companies which benefited from the coronavirus pandemic last year. In the nine months ending December 2020, Nomura recorded a 23 per cent year-over-year jump in its net profit of 308.5 billion yen (C$ 3.55 billion) and reported recording its best third quarter in 15 years.
Its stock, meanwhile, recorded a growth of about 54 per cent in the past one year and that of over 32 per cent year-to-date.
The above constitutes a preliminary view and any interest in stocks should be evaluated further from investment point of view.
