Daiwa Capital Markets is cementing a shift to its home market following the latest round of Hong Kong staff cuts.
The Tokyo-based firm has let go several sales staff this month and plans to relocate two structurers to its headquarters, as it shifts its risk allocation to Japan.
Within the Asia Pacific region excluding Japan, the firm will remain active in the Hong Kong warrants market, global head of derivatives and convertibles in Hong Kong, Dominique Blanchard, told SRP.
"For the time being, markets are limited in terms of dealing in OTC [over-the-counter] derivatives for us. We'll keep it for listed products, convertible bonds and warrants, but with OTC, we will mostly be sticking to Japan where we have our biggest presence. The company has less risk appetite due to its BBB rating," he said.
The firm has seen good margins and volume in its home market and will continue to offer FX, equity and interest rate structured products, Blanchard added.
At the end of last March, Daiwa Securities and Daiwa Global Markets merged into one company in Japan with a focus on the country's retail and middle markets.
Blanchard added that there will be no replacements for a number of high profile departures including former global head of derivatives structuring, Jimmy Kan, and former global head of equity derivatives trading, David Sarkis.
The firm had been cutting senior staff since September after it acquired the KBC Financial Products global convertible bond and Asian equity derivatives businesses in July 2010.