Bloomberg News

Social Networking Fund to Start Trading Tomorrow, Nomura Says

October 27, 2011

Oct. 27 (Bloomberg) -- Nomura Holdings Inc. will start tomorrow two mutual funds that invest in global operators of social networking websites.

The funds will each start with a maximum of 200 billion yen ($2.6 billion) in investments, according to the funds’ prospectuses. Nomura opened the funds, one of which will hedge against changes in exchange rates, for initial investment between Oct. 19 and today.

Japan’s Gree Inc. and China’s Baidu Inc. are among Internet stocks that have surged this year as investors see the earnings potential of online businesses that make money from advertising and games such as Zynga Inc.’s Farmville. Tokyo-based Gree, operator of Japan’s second-most popular social networking site, has jumped 136 percent.

“It’s a hot topic,” said Yutaka Yoshii, a strategist at Mito Securities Co. in Tokyo. Because investors have been aware of the fund’s schedule “Stock prices have already factored it in to some extent, but there’s also a possibility that the fund’s start could push shares higher.”

--With assistance from Pavel Alpeyev in Tokyo. Editors: Jason Clenfield, Nick Gentle.

To contact the reporter on this story: Satoshi Kawano in Tokyo at skawano1@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net


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