Welcome to today's Nomura Holdings' Second Quarter Operating Results for Fiscal Year Ending March 2015 Conference Call. (Operator Instructions). Please note that this telephone conference contains certain forward-looking statements and other projected results which involves known and unknown risks, delays, uncertainties and other factors not under the company’s control which may cause actual results, performance or achievements of the company to be materially different from the results, performance or other expectations implied by these projections. Such factors include economic and market conditions, political events and investor sentiments, liquidity of secondary markets level and volatility of interest rates, currency exchange rates, security valuations, competitive conditions and size, number and timing of the transactions. With that, we’d like to begin the conference. Mr. Shigesuke Kashiwagi, please go ahead.

Thank you this is Shigesuke Kashiwagi. I will now give you an overview of our financial results for the second quarter of the year-ending March 2015 using the document titled Consolidated Results of operations. Please turn to page 2, for the first half of the fiscal year we reported net revenue of ¥744.7 billion and income taxes of ¥125.7 billion. First half revenue was ¥72.7 billion, the second highest level in 10 years following on from the higher recorded in the first half last year. In the second quarter the environment remained challenged as geopolitical risks such as the situation in Ukraine heightened and investors weighed the outlet for monetary policy. In this environment second quarter net revenue increased by 1% to ¥373.8 billion and income before income taxes grew 43% to ¥74 billion. Net income increased 166% to the ¥52.9 billion. Second quarter ROE was 8.4% and EPS was ¥14.15. In terms of sale to returns, today we announced an interim dividend of ¥6 per share making a dividend payout ratio of 30.2%. In addition our Board of Directors today approved the resolution to setup a share buyback program in order to raise capital efficiency and ensure a flexible capital policy. The upper limit will be 40 million shares which equates to 1% of outstanding shares and maximum aggregate repurchase price of ¥28 billion. Off these 40 million shares approximately 20 million are expected to be used for stock option exercised in the future but approximately 20 million shares remaining will be used flexibly for various purposes related to our capital management policy. But performance for each business is shown from page 5 onwards which I will discuss in a minute? Regarding our business segment results shown on page 4, segment others [ph] includes a ¥6.4 billion gain from…

(Operator Instructions). The first question is from Mr. Masao Muraki of Deutsche Securities. Mr. Muraki please go ahead. Masao Muraki – Deutsche Securities: I would like to ask about the wholesale division. You mentioned the upgrade by Moody's, previously when you had your upgrade you visited overseas investors in a caravan or by a roadshow process and you worked on benefiting on from the upgrade but what are you planning to do this time to gain market share from the upgrade? And my other question is with this upgrade of two notches which part of your business will benefit? Where will you see the positive impact on the upgrade and from which quarter will you start seeing the positive impact of your upgrade? Could you talk about the upgrade -- the impact it has on your business and your revenues? And in relation to wholesale you talked about your partial shift operations [ph] from London to Japan but on page 32 of the presentation, you show Europe, Americas and Asia-Pacific, compared to three months ago the headcount has increased and I would show there are new employees or new graduates joining overseas but year-on-year there has been a headcount in Europe and the Americas. So your headcount overseas has been increasing. Which divisions or which businesses are you expanding through this headcount increase? And my second point is the change in the HR structure that you mentioned and you will have a new job type which I know are Career Type A. What is the percentage of these Type A people and how many of these people will be positioned in the branches longer compared to the past? Could you give me the percentage of the people who will be staying in the branches longer?

Let me address your questions one by one. First question was about the impact from the upgrade and what we will do in terms of communicating this to our clients, actually tomorrow I will be -- we will have people leaving Japan to visit Europe and visiting clients overseas. This is part of the regular update and for U.S. we will conduct a stakeholder communications with the clients, regulators, rating agencies and we’ve a communication officer in-charge of this type of stakeholder. So he will be visiting our stakeholders, for Asia we still do not have any plans to send people over from Tokyo but the CFO in Asia will communicate with our clients and right now our sales offices in Asia have been asking us about the impact of Moody's and also details on the deposit insurance law, we’re receiving inquiries from Asia. And that will lead to the impact on our business which was the second part of your first question, as for the sectors which will be impacted it will mainly be the management or asset managers which handle other people's money and also businesses which cover the public institutions and also international organizations. These clients will start doing more business with us mainly in derivatives because we would probably meet or we have now meet the minimum level of ratings which they require and actually two weeks ago when we attended the World Bank meeting in Washington for IMF with our CEO, Mr. Koji Nagai and Mr. Ozaki from Wholesale and we had meetings with clients and we talked about the upgrade and then they offer to do derivative transactions with us. We got this immediate response and feedback from them. Last year when we were upgraded by Fitch I think at that time I think…

As for the balance sheet, we believe our balance sheet is relatively I wouldn’t say loose but we are not limiting the usage of balance sheet as much as our peers but having said that when you think about the regulatory environment in the future we cannot leave current situation as it is and I’ve been talking about this with the front office teams and when we talk with retail and also equities fixed income in order to allocate resources they are pretending to focus more on the larger clients in their resource allocation and when we offer the balance sheet usage or leverage we make sure that the business is going to generate a certain amount level of profits and if you look at our balance sheet it has shrunk by ¥100 billion, this is probably due to the -- end weekend [ph] the balance sheet could have increased or expanded but we have -- our front office has been controlling the balance sheet through efficient operations.

The next question is from JPMorgan Securities. Ms. Tsujino. Ms. Tsujino, please go ahead. Thank you. Natsumu Tsujino – JPMorgan Securities: First of all regarding page 10, the heat map on page 10, fixed income this size, in the Americas, Europe, they are all coming down, down by 30% or so in these regions. Not many sales [ph] disclosed these details. If we look at your peers they do not disclose to such an extent. They usually put this on Europe and Americas, quarter-to-quarter, the declines of your peers several percentage points but down by 30%. So why have this come down? What are the characteristics which are contributed to this and what is the outlook for the third quarter?

I’ve taken a closer look at all our foreign peers but quarter-to-quarter there has not been much of a decline but in some sense when it comes to emerging currencies or emerging markets or currencies some have done strong performance that’s exactly the same for us. Our forex presence has been very good and that’s why overall it's fine. In other words other segments were not very good, just had good regionalized and Asia ex Japan in terms of rate, forex, structured product related business, the Asian financial institutions manage their surplus funds and they have had strong demands for products that’s why as forex business is concerned dollar is strong. We were able to capture that trend and in Asia, the strong countries such as Indonesia and India as opposed to weaker countries, so in terms of the trading environment I think it was easier for our clients to trade. So in Europe, Americas, (indiscernible) comments and there were some developments in those other regions. It was difficult for people to capture or identify trends. So in Europe and Americas, rates and credits in those segments we saw a slowdown what offset -- that was global forex and Asia emerging markets business. Now going forward, our outlook is as follows, in (indiscernible) you know the market have seen increased volatility -- in others when volatility was tough into October with increased volatility, it's not easier either. In terms of the season between October and December trading by clients tend to slowdown, so we’re not after profitability over the short term and we have been reducing risks since the end of the September. If there is an opportunity we will look to increase risk but for the time being we’re going to see a slow trend and with the upgrade by Moody's we like to take advantage of that and make solid efforts in sales into the next year. Natsumu Tsujino – JPMorgan Securities: I’ve two technical questions remaining, one for the firm wide, the liquidity pool cost Q-on-Q has it increased or is it flat?

Our firm wide liquidity pool cost is more less flat. That means since that -- negative segments and allocation is increasing in -- does that mean that allocation to the business is decreasing is that correct? That maybe the tendency that we might have seen this quarter. Thank you. Natsumu Tsujino – JPMorgan Securities: This is my last question, thanks for being technical. Looking at discretionary investments, unlisted value gains and losses are they included in this?

No they are not. Natsumu Tsujino – JPMorgan Securities: Understand. But Chicago's [ph] shareholding that’s being reduced and it's listed elsewhere as a negative is that correct?

I am sorry, Chicago [ph] is under the others. Thank you.

The next question is from Mr. Shiota of Daiwa Securities. Jun Shiota – Daiwa Securities: I’ve two questions, one is in relation to the retail business. On page 6, you show that the discretionary investments -- discretionary -- the large growth and in your comments you talked about the target of 69.9 billion for March '16 and how you’re outpacing that and the client assets exceeded ¥99 trillion so you’re getting closure to the ¥100 trillion mark. So you saw a lot of growth in the quarter but was this due to some kind of extraordinary reason or was it thanks to the strong market? Could you explain the reason for strong growth and your future outlook? Is this kind of very fast growth going to continue? Could you share your views on that please? My second question is in relation to your share buyback, and you will use half of the shares that you buyback for stock options. Going forward how many more shares do you have to buyback for using for stock options purposes?

As for your first question, was it -- are you talking about the discretionary investments or are you talking about client assets or just are we talking in general? Jun Shiota – Daiwa Securities: Yes I was talking about discretionary investments and also the increase in the net inflow.

There were no other extra-ordinary items, extra-ordinary reasons. So I think it was a result of us capturing our clients' needs based on the shift in our business model. So it's a result of our efforts I think and we expect this to continue in the future and as I mentioned in my presentation the discretionary investments have seen further acceleration in the month of October. Jun Shiota – Daiwa Securities: So again it's not really due to the strong market, it's based on your own efforts?

Yes I think what we saw this month is that we saw growth even though the overall market declined the sales to our clients especially in the equities area. So we saw a lot of growth in our sales even though the overall market was down and for discretionary investments there are people who buy regardless of whether the market is going up or down and actually not only did we win new accounts but also some of our existing clients increased their holdings, or increase their balance and we expect that to continue in the future as well. Jun Shiota – Daiwa Securities: And second question about the stock options, and also the share buyback and how many more shares we need to buyback for stock option purposes?

Well this will be calculated at the end of the fiscal year after we have closed the books and we calculate the results and we will allocate the shares for stock option. So we do not have a clear figure for you but the reason why we conducted this share buyback is not to allocate shares for previous stock options but it is for allocation for next May and we’re buying part of the shares that we will be using in next May. So it's not for previous stock options. Jun Shiota – Daiwa Securities: So when you saw, this action was part of the stock options in May but does this mean that you will continue having to buy shares in next year. Is there a fair chance that you will need to buy more shares for stock options?

Yes at the end of April next year we will go and buy the remaining shares we need for next year's stock option and we’re diversifying the timing of acquisitions of the shares for stock options. Thank you.

Next question is from (indiscernible) of Merrill Lynch Japan. Please go ahead.

I have this one point to ask about the domesticated system and its change. Why are you changing the system at this timing? What is the motivation or the rationale behind the change if you could please explain? You talked about the term and the paying out, does that mean that short term costs are going to rise or are you expecting operating income to go up in the future? So if you could further elaborate on that. Those are the two points I wanted to ask. Thank you.

There are two separate discussions, General Tier Type A, their (indiscernible) will be extended from three years to five years so that’s one thing and another aspect is for General Tier Type A or B those who want to apply to them they can remain in self-positions and they can serve up to age 65 and they don’t have to be transferred, they don’t have to move. We have an FA system so it's going to be a new system to the FA system that’s currently in place. The basic philosophy behind is the same for one thing we want our people to serve the local customer in the local community over an extended period of time, we want them to have solid dialogue and gain their trust so that AUM can be increased and broke more than the brokerage revenues, stock per revenue should be focused upon as they conduct their sales activity. So those are the two main reasons and to give you further detail in terms of the age balance I think it's the same with any financial institution in Japan in 1989 -- 1991 we are having a large number of employees who belong that Asia bracket but when it comes to those who have slightly younger than those people the number of employees is smaller. So those who will be reaching middle managerial positions we want them to work longer and demonstrate their experience and expertise that they have accumulated over the years to sell to their customers in their sales activities. So that’s the purpose of the system. It may appear as a sudden decision but actually this is something that we have been internally discussing for the past year or so.

With respect to incentives, what kind of incentives are you going to give them? Are you going to review the incentives this time as well?

The payout for brokerage revenue that will be reduced and stock revenue as a related to payout will be increased and we want to make sure that short term costs are not going to rise but as the balance goes up in the future, the revenue that we gain will be greater that is what we expect to see. Thank you.

This will start at the beginning of the next fiscal year, when will this be initiated?

That will be my last question. This is going to be implemented April next year. Thank you.

The next question is from Mr. Niwa of SMBC Nikko. Koichi Niwa – SMBC Nikko Securities: I’ve two questions, one is in relation to the domestic investment trust sales and the tone of the pace of sales and second is in relation to the tax. First, I don’t know if you -- based on the time series data on page 23 of the presentation, you saw the investment trust sales in Q2, ¥2.4 trillion. Is this level an organic level? And historically I think this is in-line with the average -- the historic average but based on the current situation of your sales activities or your retail business how much organic growth can you expect going forward for investment trust sales that’s my first point. Second this is a technical issue but the tax expense was relatively low in Q2, and could you explain why and also could you explain the thinking behind the tax? Thank you.

Yes for investment trust sales, compared to last year when there was a lot of trading volume and the market suddenly picked up due to the tax -- changes in the tax scheme or changes in the tax break. I think we cannot compare with last year but the industry constantly grew during the September quarter when the market was relatively quiet and in October we’re continuing to see steady investment trust growth. So I think we will continue to see growth regardless of market conditions. And secondly as for the corporate tax it was 28% and this is mainly due to the overseas profits that’s actually in Asia we booked a lot of profits in Asia or AEJ and on a net basis -- the fact it's not cultivated on net basis so if one office, one region generates large profits overseas we can use the differed loss or cumulative loss to offset the profit and this quarter the main reason for the low tax was because of the large profit in Asia and there are some other tax adjustments that have been made. So from the next period onwards when things normalize the impact should go back up to the lower 30% range which is the normal level.

(Operator Instructions). A few closing comments from Nomura Holdings.

Thank you very much for being with us until late in the evening for the second quarter between July and September, we the top management are satisfied in terms of retail reform and asset management assessment is increasing its balance. We’re very pleased about that, as far as the wholesale's division is concerned we’re having better relationships with overseas regulators and they are leading to reduction in funding costs into October, thanks to our efforts Moody's has upgraded us and the momentum is increasing thanks to that. And in terms of the business portfolio Asia is doing very well. We have pretty well diversified revenue source and we shall continue to make efforts in the second half. Thank you, once again.

Thank you for your time and this concludes today's conference call. You may now disconnect your line.