Morning News &Views -Asia:A Summary of Select Global Markets Research

Japan in the 2000s: online brokers, weak market and diversification. The 2000s were challenging for traditionalbrokers in Japan: internet penetration grew rapidly, the market was very weak and profits were volatile, due tosensitivity to turnover and the growth of internet brokers. From this period and the reactive diversification of bigtraditional players, we derive two lessons for China brokers: Lesson #1: Online broker impact is irreversible and longterm. The rapid development of online brokers in Japan led to three trends: 1) rapid growth of online securitiesaccounts, 2) increasing domination of the retail market by five online brokers, and 3) a decline in industrycommission rates. In China, online brokers emerged only in 2013, after regulators allowed accounts to be openedoff-site.