1971
In September the Amsterdam office opens.
Daiwa becomes the first Japanese lead manager for an overseas bond issue: the Singapore Development Bank’s Asian-dollar bond. The deal opens the Asian-dollar market, which grows substantially, with Daiwa capturing a large portion of the business.
1973
The steep increase of oil prices by the petroleum-producing
cartel, OPEC, triggers a recession in Japan. Economic policy
changes and growth slows. There is a fall in tax revenue.
Japan sets up a more modern social welfare system. The government
issues bonds to fund the welfare system and to stimulate public
investment and help overall economic recovery.
Daiwa Europe N.V., the Dutch subsidiary, is established. On 1 September, because of regulatory restraints, the London branch becomes a branch of the Dutch subsidiary. The Frankfurt office becomes Daiwa Europe (Deutschland) GmbH.
1975
Spot investment trusts are introduced and become popular with
the public.
Mid-1970s
Another boom in investment trusts.
Late 1970s
Government bond issues increase dramatically, accounting for
over 30% of Japan’s budget by the late 1970s. To sell
more bonds, interest rates are raised.
1977
Daiwa Securities underwrites the first eurobond in May for
the European Investment Bank.
The Japanese government begins to issue short-term (2-, 3- and 4-year) bonds in addition to the long-term (10-year) ones. Diversification attracts a wider investor base and is seen as an important improvement in the bond market.
The secondary bond market expands rapidly with market prices playing an increasingly important role. As bond activity increases, the government no longer sets artificial prices. Market prices become standard.
As the Japanese economy grows stronger, the yen is recognised as an international currency and eventually a euroyen bond is issued. An important consequence of the first euroyen issue was the expansion of the Foreign Exchange Law to allow the issue of yen-denominated bonds.
1978
New competitive system introduced for government bonds. The
linking of bond prices to the terms of issue has a profound
effect on the market.
Daiwa Switzerland S.A. established.
1979
Sears Roebuck, together with other companies, issues an unsecured
bond in Tokyo. Since 1930-33 no unsecured bonds has been allowed.
Both Europe and the US accept these bonds but the ban in Japan
was seen as a major obstacle to the Japanese market’s
internationalisation.
Sears Roebuck helps to open the door for foreign bond issues in Japan and widens the investor base.
Matsushita Electric issues an unsecured convertible bond helping to expand the domestic bond market.
1980
Daiwa issues first dollar-based, yen-linked bond in August.
The bond is dollar denominated, with redemption in dollars
based on a fixed dollar-yen exchange rate.
Medium-term government bond funds introduced, similar to US money market funds. In general US financial ideas inspire many Japanese financial instruments over the next few years.
A UK registered company, Daiwa Europe Limited, is established on 24 July.
