Deutsche Halts Almost Half Its Japanese Equities Coverage

Deutsche Bank Halts Nearly Half Its Japanese Equity Coverage
The Deutsche Bank AG headquarters in Frankfurt. Photographer: Hannelore Foerster/Bloomberg

Deutsche Bank AG stopped equity coverage on 11 out of 27 Japanese industries, the brokerage said in a note to clients today, citing “organizational changes.”

According to the note obtained by Bloomberg News, coverage has been suspended for the following sectors: communications, precision machinery, health care, information technology services, semiconductors, food, toiletries, trading houses, oil, chemicals and textiles. Aston Bridgman, a Tokyo-based spokesman for the bank, declined to comment.

“It’s a sign of the times,” said Shane Oliver, Sydney-based head of strategy at AMP Capital Investors Ltd., which has about $130 billion in assets under management. “The Japanese share market has had problems for the last 20 years, so it’s not very surprising. With the trading volumes so low, it’s hard for brokerages to support keeping people on.”

Deutsche Bank cut at least 20 jobs in Japan this week as part of its plans to reduce more than 1,900 positions worldwide, according to two people with knowledge of the matter who requested anonymity as the matter is private. The latest reductions come three months after Deutsche Bank pared about 45 equities positions in Tokyo.

Takato Watabe, an analyst for the chemicals industry at Deutsche Bank according to Bloomberg data, covers companies including Mitsui Chemicals Inc. and Kuraray Co. Watabe was ranked Japan’s No. 1 analyst by Nikkei Veritas magazine this year. He joined Deutsche Bank in 2003 from Merrill Lynch Japan Securities Co., Bloomberg data show.

Yoshio Ando, who joined Deutsche Bank from Goldman Sachs Group Inc. in 2009, dropped coverage of communications companies including Internet social networking site Mixi Inc. and mobile carrier Softbank Corp. on Dec. 6, Bloomberg data show.

Yoshikazu Higurashi, ranked the nation’s No. 5 analyst by Nikkei Veritas this year, dropped coverage of electronics makers such as Canon Inc. and Olympus Corp. on Dec. 6, Bloomberg data show.

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