Japanese bank dips into Aussie market
(6 March 2012 – Australia) SMBC Nikko Capital Markets, the United Kingdom -subsidiary of Japan-based Sumitomo Mitsui Bank and SMBC Nikko Securities opened its securities business in Sydney last week.
Australia was a strategic move to tap the local debt markets and in turn, give Australian banks more access to the Japanese investors.
'As Japanese investors continue to seek investment opportunities in Australia, SMBC Nikko Capital Markets has established an office in Sydney to service local financial institutions and other frequent borrowers looking to diversify their funding sources and access the Japanese market,' the company said in a statement.
SMBC Nikko Capital Markets is understood to be selling yen-denominated 'samurai' bonds issued into Japan by foreign investors, while also underwriting Australian dollar-denominated bonds overseas.
Australia's high relative interest rates compared with the near-zero rates in Japan, Europe and the US have made the country an attractive destination for overseas fixed income investors. Australian banks have lowered their reliance on overseas funding in recent years but it still remains about 33 percent of total funding requirement.
Ratings agency Fitch downgraded Commonwealth Bank, Westpac and National Australia bank last month to AA- from AA because of their reliance on overseas funding. ANZ Bank was already rated AA- by Fitch.
Funding for Australian banks is expected to fall to about A$100 billion in 2012 from some A$120 billion in 2011, according to research released by National Australia Bank today.
'As Japanese investors continue to seek investment opportunities in Australia, SMBC Nikko Capital Markets has established an office in Sydney to service local financial institutions and other frequent borrowers looking to diversify their funding sources and access the Japanese market,' the company said in a statement.
SMBC Nikko Capital Markets is understood to be selling yen-denominated 'samurai' bonds issued into Japan by foreign investors, while also underwriting Australian dollar-denominated bonds overseas.
Australia's high relative interest rates compared with the near-zero rates in Japan, Europe and the US have made the country an attractive destination for overseas fixed income investors. Australian banks have lowered their reliance on overseas funding in recent years but it still remains about 33 percent of total funding requirement.
Ratings agency Fitch downgraded Commonwealth Bank, Westpac and National Australia bank last month to AA- from AA because of their reliance on overseas funding. ANZ Bank was already rated AA- by Fitch.
Funding for Australian banks is expected to fall to about A$100 billion in 2012 from some A$120 billion in 2011, according to research released by National Australia Bank today.
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