Kazuki Watanabe: Thank you. This is Watanabe of Daiwa Securities. I have two questions. First of all, third quarter flow and position and the percentage on FIG revenue and rates and exchange rates changed. And I think you were in an environment that was quite easy to monetize. But why did you struggle so much macro products and what are your prospects? Secondly, IM investment loss JPY25.6 billion. That was an improvement. Major components would be unrealized of AEC and various unrealized gains. But can you give us a breakdown and ACI-related losses? — volatility mitigation policy, I think you were taking some initiatives. This time, there was no impact from such policies.
Takumi Kitamura: Thank you for the questions. First of all, on fixed income, third quarter flow. Yes, trading and — this is Kitamura. On company-wide basis, fixed income, 9 versus one. 9 customers and risk or on position is one. That’s the ratio. And as I said, inventory or position management we were not so successful. And therefore, in terms of proportion, the client revenue outweighs our own position. And there has been stronger bias towards client revenue than ordinary times. Why did we struggle in macro products? December was quite active. And that’s our impression. October, the market reached a turning point. In October, we defended our positions without taking significant risk, and that’s probably one of the reasons why we struggled.
One of our core businesses is agency mortgage. And in the case of Nomura, macro or in the rates business, this is included in the rates business. Maybe the demarcation is different in our peers, but in our case, we include this in macro. And again, there was some activity slowdown and also the market environment was extremely tough. So we were not able to capture revenue opportunities in this area and fixed income, especially macro products was a big challenge for us. Having said so however, conversely speaking, we’re not so much concerned. Yes, there was a dip in October, but then after we have been able to cause recovery. So if we look at just the three months fixed income and rates were poor in terms of performance. But that’s only for those particular three months.
And more recently, we are seeing robust recovery, and we are confident about our position. IM investment loss breakdown, regarding quantitative disclosures from the previous session, we decided not to disclose, but ACI occupied major proportions and NCAP unrealized gains and realized gains have been included. ACI hedging portion is increasing as part of our risk mitigation policy, but we’re not taking full hedge. It’s not completely hedged. This is a partial hedge. And that is why the unrealized portion increased. And that’s part of the background. Yes, there has been impact from hedging, and there could have been upside if we hadn’t hedged. But due to partial hedging, unfortunately, our hedging position booked losses.
Kazuki Watanabe: Thank you very much. I have one follow-up question. FIG revenue. If you look at the monthly on October, November and December, can you give us the proportion?
Takumi Kitamura: October, November, December breakdown, this is Kitamura responding to that question. Fixed income, October 30%, slightly below 30%. November, about 30%. December, around mid-40s. So the performance has been improving month after month.
Kazuki Watanabe: Thank you very much for the detailed information.
Operator: The next question is from Mitsubishi UFJ Morgan Stanley Securities, Tsujino-san. Tsujino-san, please go ahead.
Natsumu Tsujino: Thank you. This time, for fixed income Japan, EMEA, U.S., could you explain the breakdown or the percentage? And I would like to have — make a follow-up question. So why don’t I stop there first?
Takumi Kitamura: Yes, this is Kitamura. For fixed income, Japan, 20% or mid-20% — 20% to 30%; EMEA, 30% to 40%; Americas, 10% to 20%. AEJ, a little bit less than 30%.
