The brokerage arm of Japan's Sumitomo Mitsui Financial Group (SMFG) plans to set up an office in Abu Dhabi as it seeks to tap the $80 billion debt capital market (DCM) in the Middle East, its chief executive said.
With the world's third largest economy in recession, Japanese brokerage firms are focusing more on their overseas strategies and are looking abroad to raise revenue.
The SMFG unit, SMBC Nikko Securities, is the first among Japanese brokerage firms to open an office in Abu Dhabi, while other brokerages already have offices in neighbouring Dubai.
"We are aiming to open a business location in Abu Dhabi, not Dubai, because our group's banking unit has a strong network there," Chief Executive of SMBC Nikko Securities Yuichiro Kondo, who took his post in April, has told Reuters.
The brokerage unit plans to start work in the largest member of the United Arab Emirates federation "as soon as possible," said Kondo, but he said it was hard to gauge how long the regulatory approval process would take due to the COVID-19 pandemic.
Nomura Holdings and the brokerage units of Mitsubishi UFJ Financial Group and Mizuho Financial Group have offices in Dubai.
Kondo also said he is considering opening an office in Paris to tap mainly debt capital markets in France and in other Southern European countries such as Spain and Italy. SMBC Nikko already has a business location in Frankfurt.
Japan's debt capital market totalled about 15 trillion yen ($140.07 billion) in the last fiscal year. ($1 = 107.0900 yen)