Most firms tend to start with the basics and work their way up the sophistication curve. Or they sell research as a loss leader to highlight their investment banking capabilities. KBC Securities is taking the opposite tack in Japan by hiring two equity analysts and a salesperson to beef up its cash equities business.

KBC Securities is a specialist in convertibles, equity derivatives and structured products. Although not a straight equities house, KBC has become a major trader as an offshoot of its work putting together, say, a convertible bond arbitrage or an equities derivative product for a client.

"Clients felt there was a place for us to pursue a different kind of cash equities business," says Mark Voumard, director of marketing and business development in Tokyo. "They told us they don't need another report on Sony, but they want information about what I'd call interesting companies." These, he adds, are usually small- and mid-sized firms overlooked by most analysts, but capable of achieving real growth. Last year, KBC Securities secured a seat on the Tokyo Stock Exchange.

KBC Securities also sees space opening for a niche player. It has no illusions about displacing a bulge bracket house but feels it can provide a complementary role now that many mid-sized European brokerages are scaling back or shutting down their Japanese research arms altogether.

It has hired James Moon and Bruce Kirk from Commerz Securities Japan as directors in its research department. Moon has 17 years of experience in small and mid-cap stocks, while Kirk has 11 years of industry experience in the telecom sector. Both report to Tsuyoshi Kuawbara, director and head of research. In addition, Shoji Shukunami has joined as an associate director in institutional sales.