Why did Daiwa's European fixed-income new-issue wheel fall off in 1996? In a record year for new-issue volumes and secondary bond trading, Daiwa Europe has plummeted like a stone in the league tables finishing 19th, compared with seventh position in 1995. Had it not been for a World Bank issue late in the year targeted into Japan, Daiwa might even have finished behind Nikko Europe which would have been seen as a disaster at Daiwa's HQ. "There would have been bodies floating all over Tokyo Bay," comments a former Daiwa trader in London.
While the firm managed to pip Nikko and avoid total ignominy, Daiwa's management will be holding an early postmortem. Will fingers be pointed at Alex Monnas, the former Hill Samuel director who has orchestrated Daiwa Europe's debt capital markets, derivatives and treasury businesses since 1988? Probably not, as the intellectually formidable Monnas was promoted to deputy chief executive only in 1995 and is the highest-ranking European in London. Clearly Monnas is held in high esteem by the Daiwa hierarchy in Tokyo.
However, even Daiwa insiders are asking whether the firm has lost its appetite for the international capital markets.