For the second straight quarter, Daiwa Securities (TSE:8601
), Japan’s second-largest brokerage, was the largest contributor to performance. Continued talk of economic reform from Japan’s new government has led to a weakening of the yen and a rally in Japan’s stock market. These positive developments contributed to Daiwa’s strong quarterly results. Compared with the same quarter last year, retail revenues increased 10% and profits more than doubled, while asset management revenues were up 4% and profits were 50% higher. In addition, the wholesale unit realized its first profitable quarter since 2009, produced by higher trading profits and commissions, along with solid cost-cutting. Although Diawa’s stock price has more than doubled over the past six months, we continue to believe Daiwa has significant upside and will remain a good investment for our shareholders.
From David Herro
's Oakmark International Fund Q1 2013 commentary