Nomura Bounces After Earnings With Shorts in Full Retreat

Nomura Holdings posted its second-quarter results this week and the stock has responded with a 1.6% gain on the day, trimming a 9% monthly decline to leave the shares at JPY 1,439. The earnings event is now behind the name, and the question shifts to what the positioning landscape looks like heading into the post-results period.

The borrow market has moved decisively since the previews published earlier this week. Availability has expanded sharply to 3,539%, meaning there are now roughly 35 shares available to lend for every one already borrowed. That is far above the tightest level seen over the past 30 days, when availability compressed toward 437% at the end of September during quarter-end short demand. The cost to borrow has collapsed alongside that loosening, falling 33% on the week to 0.63%, its lowest reading in the 30-day window. The lending market, which carried some residual caution ahead of the print, has now fully normalised. There is no squeeze pressure of any kind in the current setup.

The short score tells the same story. At 27.9, it has drifted lower over the past two weeks from a recent high of 29.6 on October 15. That score places Nomura in the 80th percentile on ORTEX's short-score rank, which in this context means the name ranks among those with less short-side pressure rather than more. The factor profile adds nuance: the dividend score ranks in the 70th percentile, earnings yield in the 73rd, both pointing to a name that screens as reasonably valued for income-oriented holders. The price-to-book ratio is essentially flat at 1.0, having contracted 0.12 points over the past 30 days as the monthly price decline compressed the multiple.

Nomura's performance stands apart from most of its Japanese broker peers this week. Daiwa Securities edged up just 0.2% on the day and 0.2% on the week, while Okasan Securities fell 1.1% on the day and is down 2.2% on the week. Marusan Securities and Matsui Securities each lost more than 2% and nearly 4% on the week respectively. Against that backdrop, Nomura's post-earnings resilience is notable, even if the monthly drawdown still weighs on the chart.

Institutional ownership provides some structural support. BlackRock holds 9.49% of shares, the largest external position on the register, and added 6.7 million shares at the last reported date. Norges Bank Investment Management added more than 8 million shares through June, bringing its stake to 1.47%. Both are recent additions rather than legacy holdings, which matters when assessing how sticky the demand is at current levels.

The key watch points now are whether the post-earnings borrow loosening holds as short sellers who covered into the print decide whether to rebuild positions, and how the monthly momentum reads once October closes given the 9% drawdown from last month's levels.