1Q FY2005 Earnings Results - Reference Data - July 29, 2005 Daiwa Securities Group Inc. This presentation may contain forward-looking statements about the Daiwa Securities Group. You can identify these statements by the fact that they do not relate strictly to historic or current facts. These statements discuss future expectations, identify strategies, contain projections of results of operations or of financial condition or state other “forward-looking” information. These statements are based on currently available information and represent the beliefs of the management of the Daiwa Securities Group. These statements are subject to numerous risks and uncertainties that could cause the Daiwa Securities Group’s actual results, performance, achievements or financial condition to differ materially from those described or implied in the forward-looking statements. The Daiwa Securities Group undertakes no obligation to publicly update any forward-looking statements after the date of this presentation. These potential risks and uncertainties include, but are not limited to: competition within the financial services industries in Japan and overseas, our ability to adjust our business focus and to maintain profitable strategic alliances, volatile and sudden movements in the international securities markets, foreign exchange and global economic situations affecting the Daiwa Securities Group.
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1Q FY2005 Earnings Results- Reference Data -
July 29, 2005Daiwa Securities Group Inc.
This presentation may contain forward-looking statements about the Daiwa Securities Group. You can identify these statements by the fact that they do not relate strictly to historic or current facts. These statements discuss future expectations, identify strategies, contain projections of results of operations or of financial condition or state other “forward-looking” information. These statements are based on currently available information and represent the beliefs of the management of the Daiwa Securities Group. These statements are subject to numerous risks and uncertainties that could cause the Daiwa Securities Group’s actual results, performance, achievements or financial condition to differ materially from those described or implied in the forward-looking statements. The Daiwa Securities Group undertakes no obligation to publicly update any forward-looking statements after the date of this presentation. These potential risks and uncertainties include, but are not limited to: competition within the financial services industries in Japan and overseas, our ability to adjust our business focus and to maintain profitable strategic alliances, volatile and sudden movements in the international securities markets, foreign exchange and global economic situations affecting the Daiwa Securities Group.
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Table of ContentsBreakdown of Operating Revenues - Consolidated - ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 3
*Foreign currency bonds (including Euro yen) under custody at Daiwa Securities JPY 2,108bil. (14.7% out of total assets at Daiwa Securities) in 3/2003JPY 2,475bil. (13.0%) in 3/2004JPY 2,969bil. (13.7%) in 3/2005JPY 3,080bil. (13.9%) in 6/2005
** Amount of assets under custody (foreign currency bonds etc) from Group companies: JPY 3,534bil.
Assets under Custody
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* # of designated accounts was approximately 1.15 million as of the end of 6/05.
Major lead manager deals during 1Q (including joint lead issues)Major lead manager deals during 1Q (including joint lead issues)
Sumitomo Mitsui Banking Corporation "SMBC" (Total JPY 65bil.), SHARP (Total JPY 50bil.), J-Power (Total JPY 50bil.), Shikoku Electric Power (JPY 30bil.), Sumitomo Realty & Development (JPY 30bil.), ORIX (JPY 30bil.), The Sumitomo Trust & Banking (JPY 30bil.), CHUBU Electric Power (JPY 20bil.), Tohoku Electric Power (JPY 20bil.), Taiheiyo Cement (JPY 20bil.), Sumitomo Rubber Industries (JPY 20bil.), Nippon Oil (JPY 20bil.), Sumitomo Chemical (JPY 15bil.), Promise (JPY 10bil.), AIFUL (JPY 10bil.), Sumitomo Metal Industries (JPY 10bil.), Shikoku Electric Power (JPY 10bil.), Shizuoka Bank (JPY 10bil.), etc.
* Issue size over ¥10 billion
Japan Highway Public Corporation (Total JPY 260bil.), THE GOVERNMENT HOUSING LOAN (JPY 96.6bil.), Development Bank of Japan (JPY 50bil.), Japan Railway Construction, Transport and Technology Agency (Total JPY 45bil.), Japan Student Services Organization (JPY 40bil.), Japan Finance Corporation for Municipal Enterprises (JPY 20bil.), etc.
Straight Bonds
Straight Bonds
Agency Bonds
Agency Bonds
Daiwa Securities SMBCInvestment Banking (1)
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Honeys (Primary, secondary offerings JPY 6.8bil.), Sumitomo Light Metal Industries (Primary, secondary offerings JPY 6.1bil.), etc.
DAIWA SYSTEM (JPY 3.5bil.), Japan Communications (JPY 2bil.), WiZ (JPY1.1bil.), Fujita Corporation (JPY 0.4bil.), etc.
* Deals over JPY 5billions
Chiao Tung Bank (USD 2.1bil., USD 43mil.), China COSCO Holdings (USD 1.2bil., USD 0.15bil.), Chi Mei Optoelectronics (USD 0.75bil., USD 97mil.), Shanghai Electric (USD 0.64bil., USD 52mil.)
*From left: total underwriting amount, POWL allocation amount
Republic of Poland (Samurai bond JPY 75bil.), Republic of Hungary (Samurai bond JPY 75bil.), The Korea Development Bank (Samurai bond JPY 30bil.), EUROFIMA (Samurai bond JPY 3bil.), Rabobank (Euroyen bond JPY 50bil.),Banco BPI (Euro bond Euro 0.3bil.), Intesa Bank Ireland (Eurodollar bond USD 0.25bil.), BNP Paribas (Euro bond Pound 0.25bil.), Kaupthing Bank (Euro bond Euro 0.1bil.),Banco Bilbao Vizcaya Argentaria (Euro bond Pound 0.1bil.), etc.
Equity Primary & Secondary Offerings
Equity Primary & Secondary Offerings
IPOIPO
POWL(Public offering without listing)
POWL(Public offering without listing)
BondsBonds
Daiwa Securities SMBCInvestment Banking (2)Major lead manager deals during 1Q (including joint lead issues)Major lead manager deals during 1Q (including joint lead issues)
·BANDAI, a major toy company, and NAMCO, a major game company, are ready to merge this autumn. The new integrated company will become the second largest entertainment company engaged in game software and toys, with sales adding up to more than JPY 450bil. (Advisor to BANDAI)
·The Sumitomo Trust & Banking purchased approximately 60% of the total issued shares of Matsushita Leasing & Credit from Matsushita Electric Industrial (MEI). As a result the percentage of shares held by MEI fell to approximately 34%. (Advisor to MEI)
M&AM&A
StructuredFinance
StructuredFinance
Major lead manager deals during 1Q (including joint lead issues)Major lead manager deals during 1Q (including joint lead issues)
Daiwa Securities SMBCInvestment Banking (3)
Federation of National Public Service Personnel Mutual Aid Associations, ABS for individual investors (Domestic private placement bond, Issue JPY 100bil., Underwriting JPY 90bil.)
Series 6 RMBS issued by The Chuo Mitsui Trust and Banking (Trust beneficiary rights, Issue JPY 80bil., Underwriting JPY 52bil.)
Series 1 non-recourse loan securitization by The Chuo Mitsui Trust and Banking(Trust beneficiary rights, Issue JPY 63bil., Underwriting JPY 47.8bil.)
Shinjuku Sumitomo Building ABS issued by PrimeQuest Three and PrimeQuest Four (Domestic private placement bond, Issue and underwriting JPY 62.2bil., JPY 41.5bil., respectively)
Co-lead manager of IPO by Japan Logistics Fund (J-REIT, Issue JPY 32bil., Underwriting JPY 12bil.)
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·Confidence level: 99%·Holding period: 1 day·Adjusted for price correlation between products
Range and assumption of VaRRange and assumption of VaR
VaR
3/05 6/05
1.86 0.77
0.52 0.48
0.06 0.08
2.44 1.33
-0.40 -0.38
2.04 0.95
High 6.21 2.39Low 0.78 0.95
Average 1.58 1.66
(Month end)
Equity
Interest
Currecy
Total
Diversificationeffect
VaR
Qua
rter
ly
(Y bil)Daiwa Securities Group
(Consolidated)Daiwa Securities Group
(Consolidated)
Note: From 1Q FY2005, VaR of the Daiwa Securities Group (consolidated) is disclosed in addition to VaR at Daiwa Securities SMBC as a measure of market risk related to trading positions.
Daiwa Securities SMBC(Parent)
Daiwa Securities SMBC(Parent)
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FY2005
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
Average daily trading value in TSE, OSE, and NSE; (Y bil) 715 1,150 1,197 1,345 1,569 1,180 1,199 1,468 1,356
Daiwa Global Bond FundDaiwa Oceania Bond FundDaiwa European Bond FundHigh-Grade Oceania Bond OpenDaiwa High-Rating CAD Bond OpenDaiwa High-Rating AUD Bond OpenDaiwa High-Rating Euro Bond OpenHigh-Grade USD Bond OpenDaiwa High-Rating USD Bond Open
Daiwa Asset ManagementMonthly Payment Foreign Bond Investment Trust
·Total figure is the sum of consolidated group companies and Daiwa SB Investments.·Figures for Daiwa Securities include Financial Advisers (FA).·Figures for Daiwa Securities SMBC include employees of Daiwa Securities SMBC Principal Investments.