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“Ex-Japan” title may take a final bow with Goldman

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The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

By Una Galani

MUMBAI, Nov 21 (Reuters Breakingviews) -What’s in a job title? A good bit of signalling. With the retirement of Masanori Mochida as Goldman Sachs’ GS.N president of Japan at the end of this year, the U.S. firm has the option to follow its rivals and have his successor report into, or at least notionally sit under, the Asia boss. After a long lull, Tokyo’s markets are glistening – the Nikkei stock index .N225 topped a 33-year high on Monday – but foreign banks grappling with a shifting Asian centre of gravity may nonetheless opt to bring Japan into the regional fold.

Mochida is a force. He led the U.S. bank’s business in the $4 trillion economy for around two decades. Goldman was in the top three foreign banks by investment banking revenue and by M&A volumes for most of the past 10 years, per Dealogic. Those successes easily justified allowing Japan separate oversight and Mochida’s seat on the global management committee alongside Kevin Sneader, president of Asia Pacific ex-Japan.

The case for what to do next isn’t clear-cut. Some historical reasons for why banks looked at Asia ex-Japan have faded. Japan’s equity and bond markets are now dwarfed by China’s in size, for example. However, Japan remains the only Asian country in the G7. That sets it apart from the emerging markets that dominate the rest of the region. Although Australia is also a rich, sophisticated, place to do business, it is too small for most banks to carve out.

However, as economic activity slows down in China, investment banking fees in Hong Kong may not recover to be on par with Japan as they were prior to 2019. And Japan retains a 35% weighting in the MSCI AC Asia Pacific Index .dMISX00000PUS, a key benchmark for fund managers, the largest of any country. At the same time, global investors including U.S. pension funds are trimming allocations to the People’s Republic on geopolitical concerns. That gives them an extra incentive to buy Japanese assets.

For global banks, the Asian centre of gravity has shifted over the past 20 years to Hong Kong thanks to China’s rise. Yet the last few years have seen a shakeup. The Asia CEOs for Swiss bank UBS UBSG.S and for Deutsche Bank DBKGn.DE now sit in Singapore, Barclays’ BARC.L Asia CEO is in Mumbai. And while Citi C.N remains committed to Asia, where it has two of its four global wealth hubs, the bank no longer has regional CEOs following a global restructuring. Who Goldman picks to run Japan will determine how it sets up reporting lines, and whether the “Asia ex-Japan” CEO title takes a final bow too.

Follow @ugalani on X


Goldman Sachs' Japan president Masanori Mochida has decided to retire at the end of the year after more than 38 years at the investment bank, according to an internal memo seen by Reuters.

The memo, from Goldman’s CEO David Solomon, said Mochida would become a senior director, without mentioning who would succeed him president. Mochida is also a member of Goldman's management committee.

"Masa has served as an invaluable advisor to our most important clients across Japan and beyond on countless transactions, helping them advance their strategic objectives with Goldman Sachs at their side," the memo said.

China's equities markets are larger than Japan's China's equities markets are larger than Japan's https://tmsnrt.rs/47FWp0d

Editing by Francesco Guerrera and Thomas Shum


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