Japan's Daiwa invests $128 million in marketing company as stock fee shrinks

TOKYO (Reuters) - Japan's Daiwa Securities Group Inc 8601.T said on Thursday it would invest 14 billion yen ($128 million) in a marketing company Katana, aiming to diversify revenue sources as stock transaction fees are expected to shrink.

Katana was founded in 2017 by Tsuyoshi Morioka, who helped turn around Osaka-based entertainment park Universal Studios Japan, according to the company.

The move comes as Japanese securities firms, including Daiwa, have struggled with their sluggish retail business under volatile market conditions.

Daiwa posted a 83.1% decline in its retail division’s recurring profit during the three months through September, while Nomura, the country’s largest brokerage and investment bank, said its pretax income for the division dropped 57% in the same period.

The capital tie-up will contribute to domestic companies in terms of marketing, said Daiwa’s senior executive managing director Akihiko Ogino, adding that marketing is not regarded as an important factor for Japanese companies.

While more than 60% firms in the U.S. have a position of chief marketing officer, fewer than 1% of Japanese companies did as of 2014, government statistics show.

Katana will use 3 billion yen from Daiwa’s investment for a company that is developing an amusement park on the southern island of Okinawa, its chief executive Morioka said, saying the marketer is working with other partners to opening the park in 2024 or 2025.

Reporting by Takashi Umekawa; Editing by Stephen Coates and Gerry Doyle