To be sure, these aren't normal times for brokerage firms. Japanese retail investors, who once put nearly a third of their savings into stocks, now allot less than 8 percent to equities. Moreover, the advent of deregulated commissions and the emergence of online brokerages have intensified competition. Nikko's online subsidiary, Nikko Beans, boasts a 6.9 percent share of online retail transactions. The remaining fifth of the market is divided among roughly 50 middle-rank traditional brokerages and a dozen strictly online operators.
Prospects are grim for a number of the latter because of paltry customer bases.
Investors already appear to have decided who the winners and losers are. The growth of online trading in Japan has been spectacular. Matsui, Monex, DLJdirect SFG and Orix all have bold and clearly defined business strategies in a country where deliberate risk-taking and refusing to run with the herd constitute exceptional behavior. All four have bet their futures on how the online market develops. Matsui Securities has staked out what its CEO calls semipro investors, or wealthy, often older Japanese who have been trading stocks for several years.