Investors interested in Financial - Investment Bank stocks are likely familiar with Nomura Holdings (NMR) and MarketAxess (MKTX) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while ou ...

Core Insights - Overnight money market rates have significantly decreased following an influx of cash into the banking system by the Reserve Bank of India (RBI), creating an arbitrage opportunity for banks [1][8] - The tri-party repo rates have fallen below the RBI's Standing Deposit Facility rate of 5%, with the spread widening to 34 basis points recently and reaching 75 basis points last week [1][8] - The amount of money banks are parking with the RBI surged to a record Rs 5 lakh crore, up from Rs 1.4 lakh crore just two weeks prior, indicating a substantial increase in banking liquidity [3][8] Banking Sector Dynamics - The current liquidity surplus is the largest seen in six months, contrasting with a tight liquidity situation just two months ago [8] - Analysts are questioning whether the RBI is intentionally allowing easier financial conditions to facilitate the transmission of previous rate cuts to the broader economy [8] - Banks are reportedly utilizing the excess liquidity for profitable arbitrage rather than extending credit to businesses, which may undermine the RBI's efforts to boost lending [1][8] Future Expectations - It is anticipated that rates will rise by the end of February as liquidity tightens due to tax outflows, with conditions expected to remain strained in March, coinciding with the close of the financial year [8]

Core Viewpoint - The recent significant rally of the Indian rupee, the largest in seven years, may provide the Reserve Bank of India (RBI) with the opportunity to rebuild its foreign-exchange reserves, although this could limit further gains following the India-US trade deal [1]. Group 1: Market Predictions and Strategies - Barclays Bank Plc and Nomura Holdings Inc. predict that the RBI will utilize the rupee's recovery to purchase dollars, with Nomura forecasting the rupee to reach 94 to a dollar by May, while Barclays aims for the same level through a three-month offshore position [2]. - Barclays advises clients to tactically short the rupee, anticipating that the current rally will not be sustainable and that equity outflows will not fully reverse [9]. - MUFG Bank Ltd. recommends clients to build long dollar/rupee positions in the medium term [9]. Group 2: RBI's Intervention and Market Dynamics - The rupee experienced a slight decline of 0.1% to 90.40 against the dollar, following a 1.4% increase attributed to a US tariff cut, which helped it recover from being Asia's worst performer last month to the region's top gainer [3]. - The RBI has a significant negative short forwards book of $62.4 billion as of December, indicating a need to repay these dollars, which contributed to the rupee's underperformance in the second quarter of 2025 [5]. - The RBI sold a net $49.5 billion in dollars in 2025 to support the rupee, while forex reserves reached a record $709 billion, aided by a weaker dollar, rising gold prices, and RBI's forex swaps [6]. Group 3: Future Outlook and Analyst Opinions - Analysts at Societe Generale predict the rupee could strengthen to 87-88 in the coming weeks, while HSBC forecasts a move to 88 by the end of March [10]. - Standard Chartered Plc suggests that while the RBI may eventually rebuild reserves, it seems unlikely at current levels, with HSBC expecting the central bank to allow the rupee to recover in the March quarter before rebuilding reserves [7]. - The RBI's recent interventions have aimed to buy rupees as the currency tested lows, with officials stating that the exchange rate is market-determined and their role is to ensure orderly movements and curb excess volatility [8].

Group 1 - The Indian rupee has experienced its strongest rally in seven years, providing the Reserve Bank of India (RBI) with an opportunity to rebuild foreign exchange reserves, which may limit further appreciation of the rupee following the US-India trade agreement [1] - Barclays and Nomura predict that the RBI will utilize this rupee rebound to purchase US dollars, with Nomura forecasting the rupee to depreciate to 94 per dollar by May, while Barclays suggests a tactical short position on the rupee [1][2] - The RBI's foreign exchange strategy under Governor Sanjay Malhotra is seen as unpredictable, complicating the assessment of the current rupee rally [1] Group 2 - The RBI sold a significant amount of dollars last year, estimated by Nomura at a net sale of $49.5 billion, to support the rupee, yet the foreign exchange reserves have reached a record high of $709 billion due to a weaker dollar and rising gold prices [2] - The key observation point is the exchange rate level at which the RBI will purchase dollars to rebuild reserves, as the central bank has intervened in the market to buy rupees during recent low points [2] - Barclays recommends a tactical short position on the rupee, citing that the current rally is unsustainable, while MUFG suggests establishing a long position on the dollar/rupee in the medium term [2] Group 3 - The primary impact on the bond market will be transmitted through the foreign exchange market and the RBI's intervention strategy, with short-term capital inflows providing the RBI an opportunity to rebuild reserves and inject liquidity into the rupee [3]

Core Viewpoint - Nomura Holdings (NMR) is currently viewed as a more attractive investment option compared to MarketAxess (MKTX) based on valuation metrics and earnings outlook [1][6]. Valuation Metrics - NMR has a forward P/E ratio of 10.51, significantly lower than MKTX's forward P/E of 20.59 [5]. - The PEG ratio for NMR is 2.03, while MKTX has a PEG ratio of 4.20, indicating NMR's better valuation relative to its expected earnings growth [5]. - NMR's P/B ratio stands at 1.02, compared to MKTX's P/B of 4.51, further highlighting NMR's superior valuation [6]. Analyst Outlook - NMR holds a Zacks Rank of 2 (Buy), indicating a positive earnings estimate revision trend, while MKTX has a Zacks Rank of 3 (Hold) [3]. - The solid earnings outlook for NMR contributes to its higher Value grade of A, in contrast to MKTX's Value grade of D [6].

Core Viewpoint - Value investing remains a preferred strategy for identifying strong stocks, focusing on companies believed to be undervalued based on fundamental analysis [2] Company Analysis: Nomura (NMR) - Nomura currently holds a Zacks Rank of 2 (Buy) and a Value grade of A, indicating strong potential as a value stock [4] - The stock's P/E ratio is 9.7, significantly lower than the industry average of 14.57, suggesting it may be undervalued [4] - Nomura's Forward P/E has fluctuated between 6.19 and 11.13 over the past year, with a median of 8.63 [4] - The P/B ratio for Nomura is 0.89, compared to the industry average of 2.46, further indicating attractive valuation [5] - Over the past 12 months, Nomura's P/B has ranged from 0.62 to 0.90, with a median of 0.77 [5] - The P/CF ratio for Nomura stands at 7.63, well below the industry average of 16.98, highlighting its undervaluation based on cash flow strength [6] - Nomura's P/CF has varied between 5.73 and 9.60 in the past year, with a median of 7.23 [6] - Overall, the metrics suggest that Nomura is likely undervalued, making it one of the strongest value stocks in the market [7]

Core Viewpoint - Nomura Holdings Inc. is reducing its cryptocurrency positions and tightening risk controls in response to financial setbacks in its European subsidiary, Laser Digital Holdings, during Q3 of fiscal year 2025 [1][3]. Group 1: Company Actions - The decision to reduce cryptocurrency holdings and implement stricter risk management reflects the challenges faced by traditional financial institutions in the volatile crypto market [2][7]. - Nomura's Chief Financial Officer, Hiroyuki Moriuchi, announced these changes during an earnings call on January 30, 2026, highlighting the impact of market volatility on the company's net income [2][3]. - Despite the adjustments, Nomura remains committed to the digital asset sector, planning to expand its business in the medium to long term [4][9]. Group 2: Subsidiary Operations - Laser Digital, Nomura's dedicated crypto arm launched in 2022, offers services such as trading, asset management, and venture investments, leveraging quantitative-driven strategies for market making [4][5]. - The subsidiary is licensed in the UAE and aims to bridge traditional banking with the digital economy, providing crypto funds and treasury management tools [5]. Group 3: Market Context - The digital asset sector has experienced significant volatility due to regulatory changes, macroeconomic factors, and investor sentiment, with late 2025 setbacks attributed to global economic uncertainties [6]. - Nomura's experience is part of a broader trend where financial institutions are recalibrating their crypto strategies to balance innovation with caution [7]. Group 4: Future Plans - Laser Digital has applied for a national trust bank charter with the U.S. Office of the Comptroller of the Currency, which, if approved, would allow it to offer cryptocurrency custody and trading services under federal oversight [8]. - This application indicates Nomura's intent to strengthen its presence in the U.S. market while focusing on institutional clients rather than retail deposits [8]. Group 5: Financial Health - Despite challenges in the crypto sector, Nomura's overall financial health remains strong, as evidenced by a ¥60 billion share buyback program, reflecting confidence in its core operations [9].

Market Movements - US stock index futures are all down, with Dow futures down 0.32%, S&P 500 futures down 0.37%, and Nasdaq futures down 0.49% [1] - European indices show positive movement, with Germany's DAX up 1.04%, UK's FTSE 100 up 0.45%, France's CAC40 up 0.76%, and the Euro Stoxx 50 up 1.04% [2][3] - WTI crude oil is down 0.61% at $65.02 per barrel, while Brent crude oil is down 0.73% at $69.08 per barrel [3][4] Market News - Trump's nomination of Kevin Warsh for the Federal Reserve chair may face hurdles due to ongoing investigations, with some Republican senators indicating they will block nominations until legal issues are resolved [5] - The financial market perceives Warsh as a more hawkish candidate compared to current chair Powell, potentially leading to tighter monetary policies [5] - Gold and silver prices have seen significant declines, with gold dropping over 5% to $5,099 per ounce and silver down over 12% to $101.4 per ounce, raising concerns about the sustainability of recent price increases [6] - The temporary agreement between Trump and Senate Democrats aims to prevent a government shutdown, although further negotiations are ongoing [6] Investment Strategies - Bank of America indicates that global stock markets are flashing sell signals, with 89% of MSCI stock index prices above their 50-day and 200-day moving averages, surpassing the 88% threshold considered a sell signal [7] - Jeff Gundlach, known as the "new bond king," advises avoiding the US market due to high inflation and a weakening dollar, recommending a 30%-40% allocation to non-US stocks, particularly emerging markets [8] Company News - Apple reported record Q1 earnings of $143.8 billion, a 16% year-over-year increase, driven by a 23% increase in iPhone revenue to $85.3 billion, with significant growth in the Greater China region [9] - Apple CEO Tim Cook announced a partnership with Google to develop a more personalized Siri, while also warning of supply constraints due to 3nm chip production limitations [10] - Sandisk's Q2 revenue is projected to grow 61.2% to $3.03 billion, exceeding market expectations, with a strong performance in data center and consumer segments [11] - Western Digital reported a 25% increase in revenue to $3.02 billion, with net profit surging 296%, driven by AI infrastructure demand [12] - KLA Corporation's Q2 revenue grew 7.2% to $3.3 billion, benefiting from AI infrastructure expansion, but concerns about valuation risks have emerged [13] - Visa's Q1 adjusted earnings were $3.17 per share, a 15% increase, with total payment volume reaching $3.87 trillion, exceeding expectations [14] - ExxonMobil's Q4 adjusted net profit was $1.71 per share, driven by increased oil production and refining margins, while Chevron's Q4 adjusted earnings were $1.52 per share, with plans for production growth [15][16] - Coterra Energy and Devon Energy are reportedly in talks for a potential merger, which could be one of the largest oil and gas deals in recent years [17]

Core Viewpoint - Nomura reported strong third-quarter operating results for the fiscal year ending March 2026, with a notable return on equity and solid performance across its main divisions, although losses in the "other" segment related to digital assets partially offset these results [4][7]. Financial Performance - Group-wide net revenue totaled JPY 551.8 billion, reflecting a 7% increase quarter-over-quarter [3][7]. - Pre-tax income for the four main divisions rose 8% to JPY 142.9 billion, the highest level in 18.5 years [2][7]. - Return on equity was reported at 10.3%, marking the seventh consecutive quarter above the target range of 8%–10% [3][7]. Segment Performance - **Wealth Management**: Net revenue increased 14% quarter-over-quarter to JPY 132.5 billion, with a pre-tax margin above 40% and record recurring revenue asset net inflows of JPY 503.9 billion [6][9]. - **Investment Management**: Achieved a record AUM of JPY 134.7 trillion, but pre-tax income fell 42% due to one-time acquisition costs and weaker gains [5][12]. - **Wholesale**: Net revenue increased 12% to JPY 313.9 billion, with significant contributions from both Global Markets and Investment Banking [16]. Shareholder Returns - Nomura announced a share repurchase program with an upper limit of 100 million shares and a total of JPY 60 billion, aimed at enhancing shareholder returns and capital efficiency [1][7]. Future Outlook - The company expects approximately $100 million in integration costs over the next two years following the Macquarie acquisition, while maintaining capital strength with Tier 1 capital at JPY 3.6 trillion and a CET1 ratio of 12.8% [5][21]. - Management indicated that Wealth Management net revenue is tracking evenly with third-quarter levels, while the Investment Banking pipeline remains solid despite a slower start [22].

Revenue Performance - Total revenue for the nine months ended December 31, 2025, was ¥3,545,729 million, a decrease of 3.1% from the previous year[12] - Net revenue increased to ¥1,590,532 million, reflecting a growth of 10.5% compared to the same period in 2024[12] - Nomura reported net revenue of 1,590.5 billion yen for the nine months ended December 31, 2025, an increase of 10.5% from the previous year[21] - Total net revenue for the same period rose by 10.1% to ¥1,586,243 million compared to ¥1,441,125 million in 2024[45] - Net revenue for the three months ended December 31, 2024, was ¥501,981 million, a 7.0% increase from ¥515,462 million in 2025[56] Income and Profitability - Income before income taxes rose to ¥432,148 million, marking a 15.5% increase year-over-year[12] - Net income attributable to Nomura Holdings, Inc. shareholders was ¥288,196 million, up 7.2% from the previous year[12] - Net income for the nine months ended December 31, 2025, increased by 9.0% to ¥297,813 million from ¥273,281 million in 2024[40] - Income before income taxes for the Wholesale segment surged by 22.2% to ¥157,337 million, while the Banking segment saw a decline of 17.6% to ¥10,969 million[45] - The company reported a net gain on trading of ¥142,013 million for the three months ended December 31, 2024, which increased by 10.9% to ¥171,944 million in 2025[56] Assets and Liabilities - Total assets increased to ¥61,935,173 million as of December 31, 2025, compared to ¥56,802,170 million at March 31, 2025[13] - Total liabilities rose by 4,899.4 billion yen to 58,120.6 billion yen, mainly driven by an increase in trading liabilities[31] - Total assets increased by 5,133.0 billion yen to 61,935.2 billion yen as of December 31, 2025, primarily due to an increase in trading assets[31] - Total liabilities increased by ¥4,899,410 million from ¥58,120,581 million as of December 31, 2025 to ¥53,221,171 million as of March 31, 2025[38] Equity and Shareholder Information - Total equity rose to ¥3,814,592 million, up from ¥3,580,999 million at the end of March 2025[13] - The return on shareholders' equity (annualized) improved to 10.8% from 10.4% in the previous year[12] - The number of shares outstanding remained constant at 3,163,562,601, with treasury stock increasing to 229,707,701[17] - Common stock held in treasury increased by ¥27,628 million from ¥171,306 million as of December 31, 2025 to ¥143,678 million as of March 31, 2025[38] Expenses - Non-interest expenses rose by 8.7% to 1,158.4 billion yen for the same period[21] - Non-interest expenses rose by 8.7% to ¥1,158,384 million, with significant increases in Investment Management (35.4%) and Banking (26.6%) segments[45] - Interest expense for the nine months was ¥217.63 million, down 11.8% from the previous year[39] - Compensation and benefits expenses for the three months ended December 31, 2024, rose to ¥190,888 million, a 13.2% increase from ¥195,079 million in 2025[56] Future Outlook - Nomura Holdings does not provide earnings forecasts for the year ending March 31, 2026, due to uncertainties in the global capital markets[15] - The company plans to expand its market presence and invest in new product development to drive future growth[39] - Future guidance indicates a cautious outlook with expected revenue growth of 1-2% for the next fiscal year[39] Acquisitions and Changes - Significant changes in the scope of consolidation included the inclusion of Delaware Management Company[16] - Nomura completed the acquisition of Macquarie Management Holdings and related entities for approximately 281.4 billion yen, enhancing its global investment management platform[26][27] - The Banking Division was newly established on April 1, 2025, leading to reclassification of prior period amounts[23] Other Financial Metrics - The company reported a substantial unrealized gain on investments in equity securities held for operating purposes, increasing from a loss of ¥1,375 million to a gain of ¥4,289 million[45] - The new accounting policy for crypto assets, effective from April 1, 2025, is not expected to have a material impact on the company's consolidated financial statements[41] - The company’s total assets information is not disclosed as it is not considered for operating decisions by the Executive Management Board[42]