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AIG to enter Japan stock business

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With hedge funds looking to expand in Japan, AIG says it will enter the market for institutional investors  


By Alex Frew McMillan and wire reports

TOKYO, Japan -- U.S. insurer American International Group said Wednesday it will open a stock-selling business in Japan aimed at institutional investors.

New York-based AIG is entering the Japanese market just as investment banks such as ABN Amro are exiting. Others have scaled down their stock selling and analysis operations.

AIG says it plans to open its office on May 22, according to Reuters news agency, which stated that AIG is already Japan's largest insurance agency that is based abroad.

Some market professionals have started to suggest Japan's moribund stock market is set for a rebound.

Hedge fund interest is rising in Japan, where the often-secretive funds hold much less of the stock volume than in the United States and Europe (full story).

Brokerage business tough in Japan

But retail stock-selling and money-management operations have proved difficult to establish in Japan, where new entrants must fight both entrenched competitors and public bias against stock investments.

The Nikkei and broader Tokyo market have never regained their full strength after Japan's bubble economy burst in the late 1980s.

Merrill Lynch and Morgan Stanley have both dispensed with most of their street-level operations in Japan, having entered the market amid considerable fanfare.

AIG plans to open its office with around 10 employees and total capital of 1.3 billion yen ($10 million).

AIG has had trouble breaking into the Asian brokerage market. It saw a drawn-out bid to buy Hyundai Securities Co. of South Korea fall apart earlier this year, with both the South Korean and U.S. sides agreeing negotiations had been fraught with difficulty.

The group, headed by Chairman and CEO Maurice Greenberg, already sells insurance in about 130 countries, getting around one-third of its revenues outside the United States.

The Nikkei is higher on Wednesday, surging ahead as Asian markets continue their solid runs this year (full story). The Tokyo market has solidly outperformed U.S. stocks in 2002.



 
 
 
 


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