We’ve discussed Daiwa Securities (TYO:8601
), Japan’s second-largest brokerage, many times in past commentaries, and it was again a top contributor this quarter, returning 21%. Daiwa’s fiscal 2012 results were very strong. Net operating revenues increased 24%, and operating expenses decreased about 7% from the year-ago period. The retail unit performed particularly well, as revenues increased 16% for the year and were 44% higher compared with the previous quarter. Operating profit in the retail unit rose 72% versus 2011, and operating margins were better than our estimates. Profits in the asset management and wholesale units were also stronger than we expected, and robust equity trading helped the company’s investment bank results. These business successes, combined with the weakened yen and the strengthened Japanese equity market, reinforce our view that Daiwa will provide good long-term returns for its shareholders.
From the Oakmark Global Select Fund second quarter 2013 commentary