Bitcoin bet sparks rally at Japan’s brokerage
TOKYO: One Japanese financial firm is riding the crypto wave like no other.
Shares of Monex Group Inc have been tracking the ups and downs of bitcoin, and have more than tripled since the cryptocurrency’s rally gained momentum in October.
The online brokerage owns crypto exchange Coincheck Inc, whose profit has soared as clients flock to digital assets.
“People are starting to re-evaluate us” by realising Monex isn’t just about stockbroking, said chief executive officer Oki Matsumoto.
“Our stock was underrated to begin with,” the former Goldman Sachs Group Inc partner said in an interview last week.
Investors have been pushing up shares of firms closely linked to digital tokens around the world, from US crypto miner Marathon Patent Group Inc to the UK’S On-line Blockchain Plc.
Bitcoin’s fivefold jump in the past year has come amid a flood of money pumped into the global financial system during the coronavirus pandemic.
Even after a pullback during a sell-off in bitcoin in recent days, Monex is the most expensive stock on an index of Japanese
“The soaring price of bitcoin has spurred trading activity and encouraged more individual investors to jump into the fray.”
Takayuki Hara
securities companies, with a price of more than three times the book value of its assets.
The stock fell 6.4% yesterday in Tokyo, paring this year’s gain to 136% - still the second-best performance on the benchmark Topix.
“There has been sharp growth in earnings at Coincheck,” SMBC Nikko analyst Takayuki Hara wrote in a Feb 22 note, raising his target price for Monex shares.
“The soaring price of bitcoin has spurred trading activity and encouraged more individual investors to jump into the fray.”
Monex has been diversifying into crypto as intensifying competition dims prospects of its mainstay stock brokerage business. It bought Coincheck in 2018, when the exchange was regrouping after a costly hack. It received a license two years ago.
Crypto business, domestic brokerage services and US trading operations now represent Monex’s “three main pillars” of growth, Matsumoto said.
Its crypto asset segment earned 2.4 billion yen (Us$23mil) in pretax profit in the quarter ended Dec 31, reversing year-earlier losses and accounting for half of total group income, according to filings.