1943
From the Sino-Japanese War to WW2, the Japanese securities market
is heavily regulated. The Big Four (Nomura, Nikko, Yamaichi
and Daiwa) of the securities market are formed through the
mergers of smaller firms. At the end of December Fujimoto
Bill Broking Securities Company merges with Nippon Trust Bank
to form Daiwa Securities Company Limited, with total capitalisation
of ¥18.75 million
1944
Due to the military draft, there is a loss of personnel. Daiwa
Securities absorbs Matsunaga Co and Yoshikawa Securities (with
experience in securities administration).
1945
Most of the large securities firms have ceased to operate
because of the war.
1946
Daiwa Securities suffers tremendous losses because of the
war. The company has lost nine out of the 23 domestic offices
and its four overseas offices. Transport and communications
in Japan are seriously disrupted. Daiwa’s short-term
goal is to recover from the losses.
Japan’s post-war economy experiences hyperinflation. The primary concern of the Japanese securities market is to sell off the enormous stockholdings of the zaibatsu by offering them to the public. This has the effect of adjusting and reopening the securities market - and also helps to popularise it by involving small investors. Daiwa participates actively in this movement to ‘democratise’ securities.
1948
Japanese securities market adopts a law modelled on the US
securities laws. This leads to the introduction of a licensing
system and to several reforms which safeguard investors and
delineate the separation of commercial banking from the securities
market. Under the law Daiwa Securities becomes strictly securities-oriented.
The call market division is separated and merged with Yanagida
Forex Company to form Tokyo Forex.
Daiwa Securities Company Limited is registered in Japan as a securities firm based on the Securities Exchange Law.
1949
Tokyo Stock Exchange is re-opened following new provisions
of the Securities Exchange Law. Deflationary policies and
disequilibrium of stock supply and demand causes chaos on
the market. To stabilise the market margin trading and investment
trusts are introduced.
The pre-war practice of speculative futures trading - which once represented half of all trading - is discontinued and only spot trading is allowed. To establish a vigorous and orderly secondary market, some speculative trading is gradually permitted.
Daiwa Securities becomes a member of the Tokyo, Osaka and Nagoya stock exchanges.
