Clients of the Nikko Group's soon-to-close Hong Kong operations will probably be absorbed by other Japanese brokerages rather than be picked up by associate Salomon Smith Barney, according to sources at the two firms.
Nikko said at the weekend it would stop taking client orders by November 30 and would only process account closure orders until it ceased all operations on January 15 next year.
The shutdown of Nikko's overseas Asian operations was expected after the May announcement of a merger between Nikko Securities and Travelers Group of the United States, which owns Salomon.
'Our business, compared to Salomon Smith Barney, it's very much duplicated,' a Nikko managing director in Hong Kong said at the time.
However, insiders believe the merger of the international operations has not progressed to the point where Nikko's Japanese institutional clients can be steered over to Salomon.
'There hasn't been much communication, I don't think there's been a lot of talk between Salomon and Nikko [in Hong Kong] on clients,' said one middle-level manager. 'A lot of the business is not in Salomon's interest to take.' A spokesman at the US brokerage said: 'We're not aware that any clients would be steered our way.' Former employees said Nikko Securities was a category B broker with a market share of less than 1 per cent on the Hong Kong stock exchange.
