Nomura : Individual Investor Survey March 2020(PDF 242KB)

News Release

Nomura Individual

Investor Survey

March 2020

12 March 2020

Global Research Division

Nomura Securities Co., Ltd.

The Nomura Individual Investor Survey is a periodic survey conducted with the aim of better understanding investing activity by individuals and providing information on related trends.

Nomura | JPN Nomura Individual Investor Survey	March 12, 2020

1. Survey results

(1) Nomura I-View Index falls to record low of -2.4

The Nomura Individual Investor Market View Index (Nomura I-View Index), based on respondents' three-month outlook for share prices and calculated by subtracting the percentage of responses for "fall" from that for "rise," was -2.4 in March 2020, down 16.6pt versus the previous survey, and below the previous record low of -2.2 set in June 2019. The Nikkei 225 reference level at the time of the survey (2 March 2020 close) was 21,344.08, down 2,086.62 versus the previous survey (9 December 2019 close of 23,430.70).

Fig. 1: The Nomura I-View Index and reference level of Nikkei 225 at time of survey
(DI)				Nomura I-View Index (lhs)							(¥)
90											24,000
				Past average for index (lhs)
80					Nikkei 225 at time of survey (rhs)						22,000
70															20,000
60															18,000
50															16,000
40
30															14,000
20															12,000
10															10,000
0															8,000
-10	06/4	07/4	08/4	09/4	10/4	11/4	12/4	13/4	14/4	15/4	16/4	17/4	18/4	19/4	(yy/m)6,000

Note: (1) The Nomura I-View Index is based on data collected by this survey and expressed as a diffusion index (DI). The calculation method is as follows: ([(number of responses indicating expected rise in share prices in the next three months) minus (number of responses indicating expected fall in share prices in the next three months)] divided by [number of respondents]) x 100. The figure for Jan 2010 used here excludes those respondents who projected that the Nikkei Average would be flat. (2) The Nomura I-View Index ranges from -100 to +100. The closer to +100, the more bullish the outlook held by individual investors. The closer to -100, the more bearish the outlook held by individual investors.

The combined percentage of respondents expecting the Nikkei 225 to rise over the next three months was 48.8%, down 8.3ppt from 57.1% in the previous survey. The percentage of respondents expecting a "rise of about 1,000 points" was down 23.8ppt versus the previous survey at 20.2%. The percentage of respondents expecting a "rise of about 2,000 points" was up 5.5ppt at 16.4%, while the percentage expecting a "rise of more than 2,000 points" fell 10.0ppt to 12.2%.

The percentage expecting a "fall of about 1,000 points" fell 2.3ppt to 27.8%. The percentage expecting a "fall of about 2,000 points" was up 9.2ppt at 16.7%, while the percentage expecting a "fall of more than 2,000 points" was up 1.4ppt at 6.7% (Figure 2).

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Nomura | JPN Nomura Individual Investor Survey	March 12, 2020

Fig. 2: Outlook for Nikkei 225 during the next three months

Rise of more than 2,000 points Rise of about 2,000 points Rise of about 1,000 points Fall of about 1,000 points Fall of about 2,000 points

Fall of more than 2,000 points

Dec 2019 Mar 2020

0	5	10	15	20	25	30	35	40	45	50
									(% of responses)

Note: Respondents were asked to share their outlook for the Nikkei 225 during the next three months based on the 2 March 2020 close of 21,344. Respondents could choose one answer from a possible six responses ranging from a rise of more than 2,000 points to a fall of more than 2,000 points, with 1,000-point increments in between.

(2) Stronger investment focus on weather & natural disasters and market factors & psychological factors

Respondents were asked to select the factor most likely to affect the stock market over the next three months. The response rate for "weather & natural disasters" rose 20.5ppt versus the previous survey to 20.9%, and the response rate for "market factors & psychological factors" rose 15.0ppt to 19.0%. Meanwhile, the response rate for "international affairs" fell 27.3ppt to 43.2%.

Fig. 3: Impact of factors on the stock market

International affairs
Weather & natural disasters
Market factors & psychological factors
Domestic corporate earnings
Domestic politics
Forex trends
								Dec 2019
Domestic interest rates									Mar 2020
0	10	20	30	40	50	60	70	80
								(% of responses)

Note: Respondents were asked to choose one answer from a possible seven responses concerning factors likely to impact the stock market over the next three months or so.

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Nomura | JPN Nomura Individual Investor Survey	March 12, 2020

(3) Appeal of pharmaceutical sector increases, appeal of automobiles sector falls

On the outlook for sectors over the next three months or so, we calculate a diffusion index (DI) for each sector by subtracting the percentage of respondents viewing it as "unappealing" from the percentage of respondents viewing it as "appealing." The DI for the pharmaceutical sector increased 34.9pt versus the previous survey to 45.1. The DI for the transportation and utilities sector meanwhile fell 10.5pt to -11.5 (Figures 4 and 5).

Fig. 4: Investment appeal by sector

	Sector	DI	Breakdown of DI (% of responses)	(Ref)
	Appealing	Unappealing	Previous DI
	Pharmaceuticals	45.1	46.9	1.8	10.2
	Materials	4.8	12.8	8.0	6.2
	Telecommunications	4.4	6.3	1.9	7.4
	Electrical equipment/precision equipment	2.8	8.7	5.9	7.3
	Capital goods/other	-1.2	4.7	5.9	7.1
	Automobiles	-9.5	3.4	12.9	-5.7
	Consumer goods	-10.5	10.4	20.9	-2.6
	Transportation and utilities	-11.5	3.7	15.2	-1.0
	Financials	-24.4	3.1	27.5	-28.9

Note: Respondents were given nine sectors and asked to choose one they viewed as an appealing investment target and one they viewed as unappealing. For each sector, we calculated a DI by subtracting the percentage of responses for "unappealing" from that for "appealing." The materials sector comprises mining, textiles, paper & pulp, chemicals, oil, ceramics, steel, nonferrous metals, and trading houses. The financial sector comprises banks, miscellaneous finance, securities, and insurance. The capital goods/other sector comprises construction, machinery, shipbuilding, transportation equipment, miscellaneous manufacturing, and real estate. The transportation and utilities sector comprises railroads & buses, trucking, shipping, airlines, warehousing, electric power, and gas. The consumer goods sector comprises marine products, food, retail, and services.

Fig. 5: DIs for selected sectors

(DI)

50

Automobiles

40

Financials

30

Capital goods/other

20

Pharmaceuticals

10

Electrical equipment/

0

precision equipment

Materials

-10

Telecommunications

-20

Transportation and

utilities

-30

Consumer goods

-40

12/1

12/7

13/1

13/7

14/1

14/7

15/1

15/7

16/1

16/7

17/1

17/7

18/1

18/7

19/1

19/7

20/1

(yy/m)

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Nomura | JPN Nomura Individual Investor Survey	March 12, 2020

(4) Most-watched stocks

Respondents were asked to name one stock that they would like to have in their portfolio, or that they find appealing, regardless of whether their investment horizon is the short or long term (including stocks actually held). We show the most popular responses in Figure 6.

Fig. 6: Name a stock with appeal (1,000 valid responses)

	Code		Company		No. of		Code		Company		No. of
			respondents				respondents
7203		Toyota Motor	74		8058		Mitsubishi Corp	11
4502		Takeda Pharmaceutical	49		9433		KDDI	11
4901		Fujifilm Holdings	46		9437		NTT Docomo	11
6758		Sony	32		4755		Rakuten	10
4568		Daiichi Sankyo	20		2702		MCDONALD'S HOLDINGS COMPANY(JAPAN)	9
8113		Unicharm	17		3197		Skylark Holdings	9
2914		Japan Tobacco	16		8001		Itochu	8
8267		Aeon	16		2802		Ajinomoto	7
4503		Astellas Pharma	14		4452		Kao	7
7974		Nintendo	14		4581		Taisho Pharmaceutical Holdings	7
9202		ANA Holdings	14		6594		Nidec	7
2897		Nissin Foods Holdings	13		8411		Mizuho Financial Group	7
9432		Nippon Telegraph and Telephone	13		9020		East Japan Railway	7
9984		SoftBank Group	13		2269		Meiji Holdings	6
6752		Panasonic	12		3038		Kobe Bussan	6
8591		Orix	12		6501		Hitachi	6
9434		SoftBank Corp	12		6981		Murata Manufacturing	6
4519		Chugai Pharmaceutical	11		7751		Canon	6
4661		Oriental Land	11

Note: Not included in valid responses were answers of "none" or clearly mistaken responses.

(5) Rise in proportion of investors expecting yen depreciation against US dollar

On the outlook for USD/JPY over the next three months, the combined percentage of respondents expecting the yen to depreciate against the US dollar was 50.4%, up 8.7ppt from the previous survey. The response rate for "fall of about ¥5 against the dollar" rose 4.6ppt versus the previous survey to 42.2%. The response rate for "fall of about ¥10 against the dollar" rose 3.6ppt to 6.3%, while that for "fall of more than ¥10 against the dollar" rose 0.5ppt to 1.9%.

The response rate for "rise of about ¥5 against the dollar" declined 10.4ppt to 40.3%. The response rate for "rise of about ¥10 against the dollar" rose 0.9ppt to 7.7% and the response rate for "rise of more than ¥10 against the dollar" rose 0.8ppt to 1.6% (Figure 7).

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Nomura | JPN Nomura Individual Investor Survey	March 12, 2020

Fig. 7: Respondents' three-month outlook for USD/JPY

Rise of more than ¥10 against the dollar

Rise of about ¥10 against the dollar

Rise of about ¥5 against the dollar

Fall of about ¥5 against the dollar

Fall of about ¥10 against the dollar

								Dec 2019
Fall of more than ¥10 against the dollar							Mar 2020
0	10	20	30	40	50	60
								(% of responses)

Note: Respondents were asked to share their outlook for USD/JPY over the next three months, referencing a 2 March 2020 indicative rate of ¥108.16. They could choose one answer from six possible responses ranging from a rise of more than ¥10 against the dollar to a fall of more than ¥10 against the dollar, with ¥5 increments in between.

(6) Investment appeal of Chinese yuan falls

On the outlook for different currencies over the next three months, we calculate a DI for each currency by subtracting the percentage of respondents viewing the currency as "unappealing" from the percentage viewing it as "appealing." The DI for the Brazilian real rose 11.5pt from the previous survey to -8.6, and the DI for the US dollar rose 8.7pt to 41.6. In contrast, the DI for the Chinese yuan fell 15.2pt to -57.0. (Figures 8 and 9).

Fig. 8: Investment appeal by currency

	Currency	DI	Breakdown of DI (% of responses)	(Ref)
	Appealing	Unappealing	Previous DI
	US dollar	41.6	46.9	5.3	32.9
	Japanese yen	20.9	30.7	9.8	29.4
	Australian dollar	6.3	9.7	3.4	10.9
	Canadian dollar	2.8	3.1	0.3	1.4
	Euro	0.5	3.8	3.3	-2.7
	Pound sterling	-7.5	1.7	9.2	-11.3
	Brazilian real	-8.6	1.2	9.8	-20.1
	Chinese yuan	-57.0	1.5	58.5	-41.8

Note: Respondents were given nine possible responses, consisting of the above eight currencies and "other, " and asked to choose one they viewed as an appealing investment target and one they viewed as unappealing. Those selecting "other" were asked to specify a currency.

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Fig. 9: DIs for investment appeal of selected currencies

(DI)

60

40

USD

20

JPY

AUD

0

CAD

-20

GBP

-40

EUR

-60

BRL

CNH

-80

10/1

10/7

11/1

11/7

12/1

12/7

13/1

13/7

14/1

14/7

15/1

15/7

16/1

16/7

17/1

17/7

18/1

18/7

19/1

19/7

20/1

(yy/m)

(7) Among financial instruments foreign equities attract greater interest

To give an indication of plans for holding financial instruments, we calculate DIs for each type of financial instrument by subtracting the percentage of respondents planning to cease holding the instrument or decrease their holdings from the percentage planning to hold the instrument for the first time or increase their holdings. The DI for "foreign equities" rose 1.3pt versus the previous survey to 13.1. The DI for Japanese equities fell 6.6pt to 42.4 (Figure 10).

Fig. 10: Financial instruments for which investors are planning either to increase or to decrease their holdings

Financial instrument		DI		Breakdown of DI (% of responses)		(Ref)
		Plan to increase	Plan to decrease		Previous DI
Japanese equities	42.4		52.1		9.7		49.0
Cash & deposits	30.2		34.9		4.7		30.2
Japanese investment trusts	14.3		21.1		6.8		15.7
Foreign equities	13.1		14.1		1.0		11.8
Gold	9.0		9.3		0.3		9.8
Foreign investment trusts		7.5		8.6		1.1		6.7
Japanese bonds	5.5		6.9		1.4		5.8
Foreign bonds	3.0		4.6		1.6		3.7
Hybrid securities	2.3		2.6		0.3		1.9
Other	0.8		0.8		0.0		0.4
None	-51.0		28.0		79.0		-53.6

s

Note: Respondents were given a list of 11 responses and asked to choose those financial instruments for which they planned to increase their holdings and those for which they planned to decrease their holdings (multiple responses were allowed). Plan to increase" refers to financial instruments that investors plan to hold for the first time or for which they plan to increase their holdings, while "plan to decrease" refers to instruments that investors plan to cease holding or for which they plan to decrease their holdings. Hybrid securities and gold were added to the list of choices from the February 2012 survey. Since the April 2013 survey, we have divided the former category of "Securities issued overseas" into foreign equities, foreign investment trusts, and foreign bonds.

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Nomura | JPN Nomura Individual Investor Survey	March 12, 2020

Fig. 11: DIs for financial instruments in which investors are planning either to increase or to decrease their holdings

(DI)

60

50

Japanese equities

40

Cash & deposits

30

Securities issued

overseas

20

Japanese

investment trusts

10

Japanese bonds

0

10/1

10/7

11/1

11/7

12/1

12/7

13/1

13/7

14/1

14/7

15/1

15/7

16/1

16/7

17/1

17/7

18/1

18/7

19/1

19/7

20/1

(yy/m)

Note: "Securities issued overseas" is the total for "foreign equities", "foreign investment trusts", and "foreign bonds".

(8) Higher percentage of respondents expect prices to be lower one year out

When asked for their outlook for prices of regularly purchased goods and services one year out, 37.2% of respondents selected a "rise" response, down 4.1ppt from last time. The percentage of respondents selecting a "no change" response was down 3.3ppt at 39.8%. The percentage of respondents selecting a "fall" response rose 7.4ppt to 23.0% (Figure 12).

Fig. 12: Outlook for prices one year out

			(Ref)
	Choices	% of responses	Previous % of
			responses
1	Fall of 5% or more	4.1	2.5
2	Fall of 2% up to 5%	6.5	3.6
3	Fall of less than 2%	12.4	9.5
4	No change (0%)	39.8	43.1
5	Rise of less than 2%	25.4	29.7
6	Rise of 2% up to 5%	9.1	9.6
7	Rise of 5% or more	2.7	2.0
	Total	100	100

Note: Respondents were asked to select one response to the question: "How do you expect prices of regularly purchased goods and services to differ from current levels one year out?"

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Nomura | JPN Nomura Individual Investor Survey	March 12, 2020

(9) Conditions for equity investment, shareholder returns, COVID-19

This month we asked spot questions on preconditions for equity investment, shareholder returns, and novel coronavirus COVID-19.

We asked investors what they thought was the most important precondition for increasing their investment in equities apart from improvement in the macroeconomic environment (including the economy, forex, and corporate earnings). The most common response, at 27.0%, was "improvement in shareholder returns (dividends, share buybacks)," followed by "lower tax burden on equity investment" (24.1%), and "greater confidence in politics and policy measures" (23.8%) (Figure 13).

Fig. 13: Preconditions for increasing equity investment apart from the macroeconomic environment

		Choices	No. of	% of total
		respondents
	1	Lower tax burden on equity investment	241	24.1
	2	Improved visibility of corporate disclosures	23	2.3
	3	Enhanced financial services	34	3.4
	4	Improvement in shareholder returns (dividends, share buybacks)	270	27.0
	5	Greater confidence in politics and policy measures	238	23.8
	6	Easing anxieties over funds to cover living expenses in the future	173	17.3
	7	Other	21	2.1
		Total	1,000	100.0

Note: Respondents were asked to select one response to the question: "What do you think is the most important condition for you to increase equity investment other than improvements in the macroeconomic environment (economy, forex, corporate earnings, etc)?"

Next, we asked the 241 respondents who chose the "lower tax burden on equity investment" response in Figure 13 which was the most important factor for them to increase equity investment. The response "eliminating capital gains tax on equities" was chosen by the largest number of respondents, accounting for 46.1% of the total (Figure 14).

Fig. 14: Most important measures for respondents who selected "lower tax burden on equity investment" as their precondition for increasing equity investment

			Choices			No. of			% of total
					respondents
	1		Eliminating capital gains tax on equities	111		46.1
	2		Eliminating taxes on share dividends	80		33.2
	3		Expanding scope of profit/loss aggregation for financial instruments	17		7.1
	4		Lowering inheritance tax on equities	12		5.0
	5		Expanding tax-exempt scope of defined contribution pensions	4		1.7
	6		Lowering taxes on gifts of long-term shareholdings	9		3.7
	7		Extending loss deferral period	8		3.3
	8		Other	0		0.0
			Total	241		100.0

Note: We asked the respondents who chose the "lower tax burden on equity investment" response in Figure 13 to choose one response to the question: "What specific measure in terms of reducing taxes on equity investment do you think is most important for you to increase equity investment?"

Next, we asked the 23 respondents who chose the "improved visibility of corporate disclosures" response to the question in Figure 13 which was the most important factor for them to increase equity investment. The response "improve corporate disclosure structures" was chosen by the largest number of respondents, accounting for 52.2% of the total (Figure 15).

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Nomura | JPN Nomura Individual Investor SurveyMarch 12, 2020

Fig. 15: Important factors for improving corporate disclosure visibility

		Choices	No. of	% of total
		respondents
	1	More proactive IR activities	3	13.0
	2	Thorough internal company education regarding insider trading	3	13.0
	3	Improve corporate disclosure structures	12	52.2
	4	Improve corporate governance	5	21.7
	5	Other	0	0.0
		Total	23	100

Note: We asked the respondents who chose the "improved visibility of corporate disclosures" response to the question in Figure 13 to choose one response to the question: "What specific measure in terms of improving the visibility of corporate disclosures do you think is most important for you to increase equity investment?"

Next, we asked the 34 respondents who chose the "enhanced financial services" response to the question in Figure 13 which was the most important factor for them to increase equity investment. The response "offering attractive financial products" was chosen by the largest number of respondents, accounting for 41.2% of the total (Figure 16).

Fig. 16: Important factors for enhancing financial services

			Choices		No. of		% of total
				respondents
	1		Offering attractive financial products	14	41.2
	2		Improved asset consulting services	5	14.7
	3		Improved face-to-face services	5	14.7
	4		Improved electronic trading	1	2.9
	5		Lower commissions	9	26.5
	6		Other	0	0.0
			Total	34	100

Note: We asked respondents who chose the "enhanced financial services" response to the question in Figure 13 to choose one response to the question: "What specific measure in terms of enhancing financial services do you think is most important for you to increase equity investment?"

We also asked about the dividend yield expected when investing in Japanese stocks. The largest response rate, at 27.9%, was for "2% or more but less than 3%." The next most popular, at 26.0%, was "3% or more but less than 4%" (Figure 17).

Fig. 17: Expected dividend yield

		Choices		No. of		% of total
			respondents
1		0% (no dividend) acceptable	17	1.7
2		Less than 1% (excluding no dividend)	11	1.1
3		1% or more but less than 2%	117	11.7
4		2% or more but less than 3%	279	27.9
5		3% or more but less than 4%	260	26.0
6		4% or more but less than 5%	139	13.9
7		5% or more	177	17.7
		Total	1,000	100

Note: Respondents were asked to choose one of a possible seven answers to the following question: "When investing in Japanese stocks, what level of dividend yield do you seek?"

We then asked investors which company shareholder return policies they focused on when they invested in Japanese equities. The most popular response, at 76.6%, was cash dividends, followed by "shareholder perks," at 50.9% (Figure 18).

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Nomura | JPN Nomura Individual Investor SurveyMarch 12, 2020

Fig. 18: Shareholder return policies on which investors focus

		Choices	No. of	% of total
		respondents
	1	Cash dividends	766	76.6
	2	Shareholder perks	509	50.9
	3	Share buybacks	192	19.2
	4	Stock splits	137	13.7
	5	None in particular	50	5.0
		Total	1,654	-

Note: Respondents were asked to choose one of the answers given to the following question: "When investing in Japanese stocks, which company shareholder return policy do you focus on?"

Finally, we asked respondents how they view the rising number of COVID-19 cases in China and elsewhere. The most popular response, at 30.8%, was "I see investment opportunities in some sectors (selectively bullish)," followed by "I see substantial risk in some sectors (selectively bearish)" at 27.9% (Figure 19).

Fig. 19: Respondents' views on rising number of COVID-19 cases

		Choices	No. of	% of total
		respondents
	1	The markets are generally over-pessimistic (overall bullish)	203	20.3
	2	I see investment opportunities in some sectors (selectively bullish)	308	30.8
	3	The markets are generally over-optimistic (overall bearish)	121	12.1
	4	I see substantial risk in some sectors (selectively bearish)	279	27.9
	5	No particular view	89	8.9
		Total	1,000	100

Note: Respondents were asked to select one response to the question: "How do you view the rising number of COVID-19 cases in China and elsewhere?"

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Nomura | JPN Nomura Individual Investor Survey	March 12, 2020

2. Nomura Individual Investor Survey

With the aim of better understanding investing activity by individuals and providing information on those trends, Nomura Securities periodically conducts a survey-the Nomura Individual Investor Survey. The results of the survey have been published since April 2006.

Survey method:Questionnaire conducted electronically using the internet monitor questionnaire service administered by Nomura Investor Relations Co., Ltd.

Survey target:Survey sent to 3,000 individual investors randomly selected from the approximately 24,000 with equity investment experience participating in Nomura Investor Relations' internet monitor questionnaire service

Number of responses:1,000 (survey closed when 1,000 responses received)

Survey period:Survey distributed on 2 March 2020, with deadline for responses on 3 March 2020

Survey content:Questions included each time are (1) share price outlook, (2) factors expected to impact the stock market, (3) attractive sectors and stocks, (4) USD/JPY outlook and attractive currencies, (5) financial instruments for which investors plan to change their holdings, and (6) inflation outlook (since July 2013). Respondents are also asked spot questions each time and queried about their personal profiles.

3. Nomura Individual Investor Survey (March 2020) respondents

Gender:Male (85.4%), female (14.6%)

Age:Under 30 (0.3%), 30-39 (2.8%), 40-49 (16.6%), 50-59 (28.4%), 60 and above (51.9%)

Occupation:Self-employed/fisheries, agriculture, forestry (7.0%), professional (physician/medical professional, lawyer, etc) (2.6%), company management/board member (4.4%), company employee/public servant (41.6%), student (0.1%), full-time homemaker (7.1%), part-time worker/casual worker/job-hopper (7.1%), unemployed/pensioner (27.8%), other (2.3%)

Region:Kanto (51.3%), Kinki (18.5%), Tokai/Koshinetsu/Hokuriku (14.1%), Hokkaido/Tohoku (4.7%), Chugoku/Shikoku/Kyushu (11.4%)

Financial assets held:Less than ¥1,000,000 (4.2%), ¥1,000,000-¥2,999,999 (7.4%), ¥3,000,000-¥4,999,999 (10.7%), ¥5,000,000- ¥9,999,999 (15.0%), ¥10,000,000-¥29,999,999 (29.0%), ¥30,000,000-¥49,999,999 (16.6%), ¥50,000,000 or more (17.1%)

Value of Japanese stocks held:Less than ¥500,000 (7.3%), ¥500,000-¥999,999 (9.7%), ¥1,000,000-¥2,999,999 (21.3%),

¥3,000,000-¥4,999,999 (17.3%), ¥5,000,000-¥9,999,999 (16.9%), ¥10,000,000-¥29,999,999 (19.5%), ¥30,000,000 or more (8.0%)

Investment experience:Less than three years (1.6%), three years to less than five years (3.0%), five years to less than 10 years (15.3%), 10 years to less than 20 years (34.0%), 20 years or more (46.1%)

Investment plan for Japanese stocks:Mainly for long-term holding (51.0%), pursuit of gains from short-term appreciation (10.2%), pursuit of dividends and shareholder perks (29.4%), no particular plan (9.4%)

Notice

The next Nomura Individual Investor Survey (June 2020) is scheduled for release on Thursday, 18 June 2020.

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Nomura | JPN Nomura Individual Investor Survey	March 12, 2020

Any Authors named on this report are Research Analysts unless otherwise indicated Important Disclosures

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The analysts responsible for preparing this report have received compensation based upon various factors including the firm's total revenues, a portion of which is generated by Investment Banking activities. Unless otherwise noted, the non-US analysts listed at the front of this report are not registered/qualified as research analysts under FINRA rules, may not be associated persons of NSI or ILLC, and may not be subject to FINRA Rule 2241 restrictions on communications with covered companies, public appearances, and trading securities held by a research analyst account.

Nomura Global Financial Products Inc. ("NGFP") Nomura Derivative Products Inc. ("NDPI") and Nomura International plc. ("NIplc") are registered with the Commodities Futures Trading Commission and the National Futures Association (NFA) as swap dealers. NGFP, NDPI, and NIplc are generally engaged in the trading of swaps and other derivative products, any of which may be the subject of this report.

Distribution of ratings (Nomura Group)

The distribution of all ratings published by Nomura Group Global Equity Research is as follows:

51% have been assigned a Buy rating which, for purposes of mandatory disclosures, are classified as a Buy rating; 44% of companies with this rating are investment banking clients of the Nomura Group*. 0% of companies (which are admitted to trading on a regulated market in the EEA) with this rating were supplied material services** by the Nomura Group.

45% have been assigned a Neutral rating which, for purposes of mandatory disclosures, is classified as a Hold rating; 56% of companies with this rating are investment banking clients of the Nomura Group*. 0% of companies (which are admitted to trading on a regulated market in the EEA) with this rating were supplied material services by the Nomura Group

4% have been assigned a Reduce rating which, for purposes of mandatory disclosures, are classified as a Sell rating; 18% of companies with this rating are investment banking clients of the Nomura Group*. 0% of companies (which are admitted to trading on a regulated market in the EEA) with this rating were supplied material services by the Nomura Group.

As at 31 December 2019.

*The Nomura Group as defined in the Disclaimer section at the end of this report. ** As defined by the EU Market Abuse Regulation

Distribution of ratings (Instinet, LLC)

The distribution of all ratings published by Instinet, LLC Equity Research is as follows:

57% have been assigned a Buy rating which, for purposes of mandatory disclosures, are classified as a Buy rating; Instinet LLC has provided investment banking services to 0% of companies with this rating within the previous 12 months.

39% have been assigned a Neutral rating which, for purposes of mandatory disclosures, is classified as a Hold rating; Instinet LLC has provided investment banking services to 0% of companies with this rating within the previous 12 months.

4% have been assigned a Reduce rating which, for purposes of mandatory disclosures, are classified as a Sell rating; Instinet LLC has provided investment banking services to 0% of companies with this rating within the previous 12 months.

Definition of Nomura Group's equity research rating system and sectors

The rating system is a relative system, indicating expected performance against a specific benchmark identified for each individual stock, subject to limited management discretion. An analyst's target price is an assessment of the current intrinsic fair value of the stock based on an appropriate valuation methodology determined by the analyst. Valuation methodologies include, but are not limited to, discounted cash flow analysis, expected return on equity and multiple analysis. Analysts may also indicate expected absolute upside/downside relative to the stated target price, defined as (target price - current price)/current price.

STOCKS

A rating of 'Buy', indicates that the analyst expects the stock to outperform the Benchmark over the next 12 months. A rating of 'Neutral', indicates that the analyst expects the stock to perform in line with the Benchmark over the next 12 months. A rating of 'Reduce', indicates that the analyst expects the stock to underperform the Benchmark over the next 12 months. A rating of 'Suspended', indicates that the rating, target price and estimates have been suspended temporarily to comply with applicable regulations and/or firm policies. Securities and/or companies that are labelled as 'Not rated' or shown as 'No rating' are not in regular research coverage. Investors should not expect continuing or additional information from Nomura relating to such securities and/or companies. Benchmarks are as follows: United States/Europe/Asia ex-Japan: please see valuation methodologies for explanations of relevant benchmarks for stocks, which can be accessed at: http://go.nomuranow.com/research/globalresearchportal/pages/disclosures/disclosures.aspx; Global Emerging Markets (ex-Asia): MSCI Emerging Markets ex-Asia, unless otherwise stated in the valuation methodology; Japan: Russell/Nomura Large Cap.

SECTORS

A 'Bullish' stance, indicates that the analyst expects the sector to outperform the Benchmark during the next 12 months. A 'Neutral' stance, indicates that the analyst expects the sector to perform in line with the Benchmark during the next 12 months. A 'Bearish' stance, indicates that the analyst expects the sector to underperform the Benchmark during the next 12 months. Sectors that are labelled as 'Not rated' or shown as 'N/A' are not assigned ratings. Benchmarks are as follows: United States: S&P 500; Europe: Dow Jones STOXX 600; Global Emerging Markets (ex- Asia): MSCI Emerging Markets ex-Asia.Japan/Asia ex-Japan: Sector ratings are not assigned.

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Target Price

A Target Price, if discussed, indicates the analyst's forecast for the share price with a 12-month time horizon, reflecting in part the analyst's estimates for the company's earnings. The achievement of any target price may be impeded by general market and macroeconomic trends, and by other risks related to the company or the market, and may not occur if the company's earnings differ from estimates.

Disclaimers

This publication contains material that has been prepared by the Nomura Group entity identified on page 1 and, if applicable, with the contributions of one or more Nomura Group entities whose employees and their respective affiliations are specified on page 1 or identified elsewhere in the publication. The term "Nomura Group" used herein refers to Nomura Holdings, Inc. and its affiliates and subsidiaries including: Nomura Securities Co., Ltd. ('NSC') Tokyo, Japan; Nomura Financial Products Europe GmbH ('NFPE'), Germany; Nomura International plc ('NIplc'), UK; Nomura Securities International, Inc. ('NSI'), New York, US; Instinet, LLC ('ILLC'); Nomura International (Hong Kong) Ltd. ('NIHK'), Hong Kong; Nomura Financial Investment (Korea) Co., Ltd. ('NFIK'), Korea (Information on Nomura analysts registered with the Korea Financial Investment Association ('KOFIA') can be found on the KOFIA Intranet at http://dis.kofia.or.kr); Nomura Singapore Ltd. ('NSL'), Singapore (Registration number 197201440E, regulated by the Monetary Authority of Singapore); Nomura Australia Ltd. ('NAL'), Australia (ABN 48 003 032 513), regulated by the Australian Securities and Investment Commission ('ASIC') and holder of an Australian financial services licence number 246412; PT Nomura Sekuritas Indonesia ('PTNSI'); Nomura Securities Malaysia Sdn. Bhd. ('NSM'), Malaysia; NIHK, Taipei Branch ('NITB'), Taiwan; Nomura Financial Advisory and Securities (India) Private Limited ('NFASL'), Mumbai, India (Registered Address: Ceejay House, Level 11, Plot F, Shivsagar Estate, Dr. Annie Besant Road, Worli, Mumbai- 400 018, India; Tel: [phone], Fax: [phone]; CIN No: U74140MH2007PTC169116, SEBI Registration No. for Stock Broking activities : INZ000255633; SEBI Registration No. for Merchant Banking : INM000011419; SEBI Registration No. for Research: INH000001014. 'CNS Thailand' next to an analyst's name on the front page of a research report indicates that the analyst is employed by Capital Nomura Securities Public Company Limited ('CNS') to provide research assistance services to NSL under an agreement between CNS and NSL. 'NSFSPL' next to an employee's name on the front page of a research report indicates that the individual is employed by Nomura Structured Finance Services Private Limited to provide assistance to certain Nomura entities under inter-company agreements. The "BDO- NS" (which stands for "BDO Nomura Securities, Inc.") placed next to an analyst's name on the front page of a research report indicates that the analyst is employed by BDO Unibank Inc. ("BDO Unibank") who has been seconded to BDO-NS, to provide research assistance services to NSL under an agreement between BDO Unibank, NSL and BDO-NS.BDO-NS is a Philippines securities dealer, which is a joint venture between BDO Unibank and the Nomura Group.

THIS MATERIAL IS: (I) FOR YOUR PRIVATE INFORMATION, AND WE ARE NOT SOLICITING ANY ACTION BASED UPON IT; (II) NOT TO BE CONSTRUED AS AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITY IN ANY JURISDICTION WHERE SUCH OFFER OR SOLICITATION WOULD BE ILLEGAL; AND (III) OTHER THAN DISCLOSURES RELATING TO THE NOMURA GROUP, BASED UPON INFORMATION FROM SOURCES THAT WE CONSIDER RELIABLE, BUT HAS NOT BEEN INDEPENDENTLY VERIFIED BY NOMURA GROUP.

Other than disclosures relating to the Nomura Group, the Nomura Group does not warrant or represent that the document is accurate, complete, reliable, fit for any particular purpose or merchantable and does not accept liability for any act (or decision not to act) resulting from use of this document and related data. To the maximum extent permissible all warranties and other assurances by the Nomura Group are hereby excluded and the Nomura Group shall have no liability for the use, misuse, or distribution of this information.

Opinions or estimates expressed are current opinions as of the original publication date appearing on this material and the information, including the opinions and estimates contained herein, are subject to change without notice. The Nomura Group is under no duty to update this document. Any comments or statements made herein are those of the author(s) and may differ from views held by other parties within Nomura Group. Clients should consider whether any advice or recommendation in this report is suitable for their particular circumstances and, if appropriate, seek professional advice, including tax advice. The Nomura Group does not provide tax advice.

The Nomura Group, and/or its officers, directors and employees, may, to the extent permitted by applicable law and/or regulation, deal as principal, agent, or otherwise, or have long or short positions in, or buy or sell, the securities, commodities or instruments, or options or other derivative instruments based thereon, of issuers or securities mentioned herein. The Nomura Group companies may also act as market maker or liquidity provider (within the meaning of applicable regulations in the UK) in the financial instruments of the issuer. Where the activity of market maker is carried out in accordance with the definition given to it by specific laws and regulations of the US or other jurisdictions, this will be separately disclosed within the specific issuer disclosures.

This document may contain information obtained from third parties, including ratings from credit ratings agencies such as Standard & Poor's. Reproduction and distribution of third-party content in any form is prohibited except with the prior written permission of the related third-party. Third- party content providers do not guarantee the accuracy, completeness, timeliness or availability of any information, including ratings, and are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, or for the results obtained from the use of such content. Third-party content providers give no express or implied warranties, including, but not limited to, any warranties of merchantability or fitness for a particular purpose or use. Third-party content providers shall not be liable for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including lost income or profits and opportunity costs) in connection with any use of their content, including ratings. Credit ratings are statements of opinions and are not statements of fact or recommendations to purchase hold or sell securities. They do not address the suitability of securities or the suitability of securities for investment purposes, and should not be relied on as investment advice.

Any MSCI sourced information in this document is the exclusive property of MSCI Inc. ('MSCI'). Without prior written permission of MSCI, this information and any other MSCI intellectual property may not be reproduced, re-disseminated or used to create any financial products, including any indices. This information is provided on an "as is" basis. The user assumes the entire risk of any use made of this information. MSCI, its affiliates and any third party involved in, or related to, computing or compiling the information hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any of this information. Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates or any third party involved in, or related to, computing or compiling the information have any liability for any damages of any kind. MSCI and the MSCI indexes are services marks of MSCI and its affiliates.

The intellectual property rights and any other rights, in Russell/Nomura Japan Equity Index belong to Nomura Securities Co., Ltd. ("Nomura") and Frank Russell Company ("Russell"). Nomura and Russell do not guarantee accuracy, completeness, reliability, usefulness, marketability, merchantability or fitness of the Index, and do not account for business activities or services that any index user and/or its affiliates undertakes with the use of the Index.

Investors should consider this document as only a single factor in making their investment decision and, as such, the report should not be viewed as identifying or suggesting all risks, direct or indirect, that may be associated with any investment decision. Nomura Group produces a number of different types of research product including, among others, fundamental analysis and quantitative analysis; recommendations contained in one type of research product may differ from recommendations contained in other types of research product, whether as a result of differing time horizons, methodologies or otherwise. The Nomura Group publishes research product in a number of different ways including the posting of product on the

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Nomura Group portals and/or distribution directly to clients. Different groups of clients may receive different products and services from the research department depending on their individual requirements.

Figures presented herein may refer to past performance or simulations based on past performance which are not reliable indicators of future performance. Where the information contains an indication of future performance, such forecasts may not be a reliable indicator of future performance. Moreover, simulations are based on models and simplifying assumptions which may oversimplify and not reflect the future distribution of returns. Any figure, strategy or index created and published for illustrative purposes within this document is not intended for "use" as a "benchmark" as defined by the European Benchmark Regulation.

Certain securities are subject to fluctuations in exchange rates that could have an adverse effect on the value or price of, or income derived from, the investment.

With respect to Fixed Income Research: Recommendations fall into two categories: tactical, which typically last up to three months; or strategic, which typically last from 6-12 months. However, trade recommendations may be reviewed at any time as circumstances change. 'Stop loss' levels for trades are also provided; which, if hit, closes the trade recommendation automatically. Prices and yields shown in recommendations are taken at the time of submission for publication and are based on either indicative Bloomberg, Reuters or Nomura prices and yields at that time. The prices and yields shown are not necessarily those at which the trade recommendation can be implemented.

The securities described herein may not have been registered under the US Securities Act of 1933 (the '1933 Act'), and, in such case, may not be offered or sold in the US or to US persons unless they have been registered under the 1933 Act, or except in compliance with an exemption from the registration requirements of the 1933 Act. Unless governing law permits otherwise, any transaction should be executed via a Nomura entity in your home jurisdiction.

This document has been approved for distribution in the UK as investment research by NIplc. NIplc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. NIplc is a member of the London Stock Exchange. This document does not constitute a personal recommendation within the meaning of applicable regulations in the UK, or take into account the particular investment objectives, financial situations, or needs of individual investors. This document is intended only for investors who are 'eligible counterparties' or 'professional clients' for the purposes of applicable regulations in the UK, and may not, therefore, be redistributed to persons who are 'retail clients' for such purposes. This document has been approved for distribution in the European Economic Area as investment research by Nomura Financial Products Europe GmbH ("NFPE"). NFPE is a company organized as a limited liability company under German law registered in the Commercial Register of the Court of Frankfurt/Main under HRB 110223. NFPE is authorized and regulated by the German Federal Financial Supervisory Authority (BaFin).

This document has been approved by NIHK, which is regulated by the Hong Kong Securities and Futures Commission, for distribution in Hong Kong by NIHK. This document has been approved for distribution in Australia by NAL, which is authorized and regulated in Australia by the ASIC. This document has also been approved for distribution in Malaysia by NSM. In Singapore, this document has been distributed by NSL. NSL accepts legal responsibility for the content of this document, where it concerns securities, futures and foreign exchange, issued by their foreign affiliates in respect of recipients who are not accredited, expert or institutional investors as defined by the Securities and Futures Act (Chapter 289). Recipients of this document in Singapore should contact NSL in respect of matters arising from, or in connection with, this document. Unless prohibited by the provisions of Regulation S of the 1933 Act, this material is distributed in the US, by NSI, a US-registeredbroker-dealer, which accepts responsibility for its contents in accordance with the provisions of Rule 15a-6, under the US Securities Exchange Act of 1934. The entity that prepared this document permits its separately operated affiliates within the Nomura Group to make copies of such documents available to their clients.

This document has not been approved for distribution to persons other than 'Authorised Persons', 'Exempt Persons' or 'Institutions' (as defined by the Capital Markets Authority) in the Kingdom of Saudi Arabia ('Saudi Arabia') or a 'Market Counterparty' or a 'Professional Client' (as defined by the Dubai Financial Services Authority) in the United Arab Emirates ('UAE') or a 'Market Counterparty' or a 'Business Customer' (as defined by the Qatar Financial Centre Regulatory Authority) in the State of Qatar ('Qatar') by Nomura Saudi Arabia, NIplc or any other member of the Nomura Group, as the case may be. Neither this document nor any copy thereof may be taken or transmitted or distributed, directly or indirectly, by any person other than those authorised to do so into Saudi Arabia or in the UAE or in Qatar or to any person other than 'Authorised Persons', 'Exempt Persons' or 'Institutions' located in Saudi Arabia or a 'Market Counterparty' or a 'Professional Client' in the UAE or a 'Market Counterparty' or a 'Business Customer' in Qatar. Any failure to comply with these restrictions may constitute a violation of the laws of the UAE or Saudi Arabia or Qatar. For Canadian Investors: This research report was approved for distribution to Canadian investors by Instinet Canada Limited ("ICL"), member of the Investment Industry Regulatory Organization of Canada ("IIROC") and member of the Canadian Investor Protection Fund. An affiliate of ICL prepared the research report (an "Affiliate Research Report") in accordance with the regulatory requirements applicable to research in the affiliate's local jurisdiction, which include conflict of interest disclosure. ICL reviewed this Affiliate Research Report for the purpose of ensuring Canadian disclosures required by IIROC are included. ICL does not receive compensation in respect of the distribution of Affiliate Research Reports. Pursuant to ICL's policies and procedures regarding the dissemination of research, ICL makes available Affiliate Research Reports to ICL clients and prospective clients only, in electronic and/or in printed form. ICL endeavours to make available and/or distribute Affiliate Research Reports to all intended recipients at the same time. This Affiliate Research Report is not a recommendation and does not take into account the investment objectives, financial situation or particular needs of any particular account.

For report with reference of TAIWAN public companies or authored by Taiwan based research analyst:

THIS DOCUMENT IS SOLELY FOR REFERENCE ONLY. You should independently evaluate the investment risks and are solely responsible for your investment decisions. NO PORTION OF THE REPORT MAY BE REPRODUCED OR QUOTED BY THE PRESS OR ANY OTHER PERSON WITHOUT WRITTEN AUTHORIZATION FROM NOMURA GROUP. Pursuant to Operational Regulations Governing Securities Firms Recommending Trades in Securities to Customers and/or other applicable laws or regulations in Taiwan, you are prohibited to provide the reports to others (including but not limited to related parties, affiliated companies and any other third parties) or engage in any activities in connection with the reports which may involve conflicts of interests. INFORMATION ON SECURITIES / INSTRUMENTS NOT EXECUTABLE BY NOMURA INTERNATIONAL (HONG KONG) LTD., TAIPEI BRANCH IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT BE CONSTRUED AS A RECOMMENDATION OR A SOLICITATION TO TRADE IN SUCH SECURITIES / INSTRUMENTS.

This document is prepared by Nomura group or its subsidiary or affiliate (collectively, "Offshore Issuers") incorporated outside the People's Republic of China ("PRC", excluding Hong Kong, Macau and Taiwan, for the purpose of this document) and it is not approved or intended to be circulated in the PRC. The Offshore Issuers are not licensed, supervised or regulated in the PRC to carry out financial services including securities investment consultancy services. The recipient should not use this document or otherwise rely on any of the information contained in this report in making investment decisions and Offshore Issuers take no responsibility in this regard.

NO PART OF THIS MATERIAL MAY BE (I) COPIED, PHOTOCOPIED, OR DUPLICATED IN ANY FORM, BY ANY MEANS; OR (II) REDISTRIBUTED WITHOUT THE PRIOR WRITTEN CONSENT OF A MEMBER OF THE NOMURA GROUP. If this document has been distributed by electronic transmission, such as e-mail, then such transmission cannot be guaranteed to be secure or error-free as information could be intercepted, corrupted, lost, destroyed, arrive late or incomplete, or contain viruses. The sender therefore does not accept liability for any errors or omissions in the contents of this document, which may arise as a result of electronic transmission. If verification is required, please request a hardcopy version.

Disclaimers required in Japan

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Credit ratings in the text that are marked with an asterisk (*) are issued by a rating agency not registered under Japan's Financial Instruments and Exchange Act ("Unregistered Ratings"). For details on Unregistered Ratings, please contact the Research Production Operation Dept. of Nomura Securities Co., Ltd.

Investors in the financial products offered by Nomura Securities may incur fees and commissions specific to those products (for example, transactions involving Japanese equities are subject to a sales commission (all figures on a tax-inclusive basis) of up to 1.43% of the transaction amount or a commission of ¥2,860 for transactions of ¥200,000 or less, while transactions involving investment trusts are subject to various fees, such as commissions at the time of purchase and asset management fees, such as commissions at the time of purchase and asset management fees (trust fees), specific to each investment trust).

In addition, all products carry the risk of losses owing to price fluctuations or other factors. Fees and risks vary by product. Please thoroughly read the written materials provided, such as documents delivered before making a contract, listed securities documents, or prospectuses. Transactions involving Japanese equities (including Japanese REITs, Japanese ETFs, and Japanese ETNs, Japanese Infrastructure Funds) are subject to a sales commission of up to 1.43% (tax included) of the transaction amount (or a commission of ¥2,860 (tax included) for transactions of ¥200,000 or less). When Japanese equities are purchased via OTC transactions (including offerings), only the purchase price shall be paid, with no sales commission charged. However, Nomura Securities may charge a separate fee for OTC transactions, as agreed with the customer. Japanese equities carry the risk of losses owing to price fluctuations. Japanese REITs carry the risk of losses owing to fluctuations in price and/or earnings of underlying real estate. Japanese ETFs and ETNs carry the risk of losses owing to fluctuations in the underlying indexes or other benchmarks. Japanese Infrastructure Funds carry out the risk of losses owing to fluctuations in price and/or earnings of underlying infrastructures.

Transactions involving foreign equities are subject to a domestic sales commission of up to 1.045% (tax included) of the transaction amount (which equals the local transaction amount plus local fees and taxes in the case of a purchase or the local transaction amount minus local fees and taxes in the case of a sale) (for transaction amounts of ¥750,000 and below, maximum domestic sales commission is ¥7,810 (tax included)). Local fees and taxes in foreign financial instruments markets vary by country/territory. When foreign equities are purchased via OTC transactions (including offerings), only the purchase price shall be paid, with no sales commission charged. However, Nomura Securities may charge a separate fee for OTC transactions, as agreed with the customer. Foreign equities carry the risk of losses owing to factors such as price fluctuations and foreign exchange rate fluctuations.

Margin transactions are subject to a sales commission of up to 1.43% (tax included) of the transaction amount (or a commission of ¥2,860 (tax included) for transactions of ¥200,000 or less), as well as management fees and rights handling fees. In addition, long margin transactions are subject to interest on the purchase amount, while short margin transactions are subject to fees for the lending of the shares borrowed. A margin equal to at least 30% of the transaction amount (at least 33% for online transactions) and at least ¥300,000 is required. With margin transactions, an amount up to roughly 3.3x the margin (roughly 3x for online transactions) may be traded. Margin transactions therefore carry the risk of losses in excess of the margin owing to share price fluctuations. For details, please thoroughly read the written materials provided, such as listed securities documents or documents delivered before making a contract.

Transactions involving convertible bonds are subject to a sales commission of up to 1.10% (tax included) of the transaction amount (or a commission of ¥4,400 (tax included) if this would be less than ¥4,400). When convertible bonds are purchased via OTC transactions (including offerings), only the purchase price shall be paid, with no sales commission charged. However, Nomura Securities may charge a separate fee for OTC transactions, as agreed with the customer. Convertible bonds carry the risk of losses owing to factors such as interest rate fluctuations and price fluctuations in the underlying stock. In addition, convertible bonds denominated in foreign currencies also carry the risk of losses owing to factors such as foreign exchange rate fluctuations.

When bonds are purchased via public offerings, secondary distributions, or other OTC transactions with Nomura Securities, only the purchase price shall be paid, with no sales commission charged. Bonds carry the risk of losses, as prices fluctuate in line with changes in market interest rates. Bond prices may also fall below the invested principal as a result of such factors as changes in the management and financial circumstances of the issuer, or changes in third-party valuations of the bond in question. In addition, foreign currency-denominated bonds also carry the risk of losses owing to factors such as foreign exchange rate fluctuations.

When Japanese government bonds (JGBs) for individual investors are purchased via public offerings, only the purchase price shall be paid, with no sales commission charged. As a rule, JGBs for individual investors may not be sold in the first 12 months after issuance. When JGBs for individual investors are sold before maturity, an amount calculated via the following formula will be subtracted from the par value of the bond plus accrued interest: (1) for 10-year variable rate bonds, an amount equal to the two preceding coupon payments (before tax) x 0.79685 will be used, (2) for 5- year and 3-year fixed rate bonds, an amount equal to the two preceding coupon payments (before tax) x 0.79685 will be used.

When inflation-indexed JGBs are purchased via public offerings, secondary distributions (uridashi deals), or other OTC transactions with Nomura Securities, only the purchase price shall be paid, with no sales commission charged. Inflation-indexed JGBs carry the risk of losses, as prices fluctuate in line with changes in market interest rates and fluctuations in the nationwide consumer price index. The notional principal of inflation- indexed JGBs changes in line with the rate of change in nationwide CPI inflation from the time of its issuance. The amount of the coupon payment is calculated by multiplying the coupon rate by the notional principal at the time of payment. The maturity value is the amount of the notional principal when the issue becomes due. For JI17 and subsequent issues, the maturity value shall not undercut the face amount.

Purchases of investment trusts (and sales of some investment trusts) are subject to a purchase or sales fee of up to 5.5% (tax included) of the transaction amount. Also, a direct cost that may be incurred when selling investment trusts is a fee of up to 2.0% of the unit price at the time of redemption. Indirect costs that may be incurred during the course of holding investment trusts include, for domestic investment trusts, an asset management fee (trust fee) of up to 5.5% (tax included/annualized basis) of the net assets in trust, as well as fees based on investment performance. Other indirect costs may also be incurred. For foreign investment trusts, indirect fees may be incurred during the course of holding such as investment company compensation.

Investment trusts invest mainly in securities such as Japanese and foreign equities and bonds, whose prices fluctuate. Investment trust unit prices fluctuate owing to price fluctuations in the underlying assets and to foreign exchange rate fluctuations. As such, investment trusts carry the risk of losses. Fees and risks vary by investment trust. Maximum applicable fees are subject to change; please thoroughly read the written materials provided, such as prospectuses or documents delivered before making a contract.

In interest rate swap transactions and USD/JPY basis swap transactions ("interest rate swap transactions, etc."), only the agreed transaction payments shall be made on the settlement dates. Some interest rate swap transactions, etc. may require pledging of margin collateral. In some of these cases, transaction payments may exceed the amount of collateral. There shall be no advance notification of required collateral value or collateral ratios as they vary depending on the transaction. Interest rate swap transactions, etc. carry the risk of losses owing to fluctuations in market prices in the interest rate, currency and other markets, as well as reference indices. Losses incurred as such may exceed the value of margin collateral, in which case margin calls may be triggered. In the event that both parties agree to enter a replacement (or termination) transaction, the interest rates received (paid) under the new arrangement may differ from those in the original arrangement, even if terms other than the interest rates are identical to those in the original transaction. Risks vary by transaction. Please thoroughly read the written materials provided, such as documents delivered before making a contract and disclosure statements.

In OTC transactions of credit default swaps (CDS), no sales commission will be charged. When entering into CDS transactions, the protection buyer will be required to pledge or entrust an agreed amount of margin collateral. In some of these cases, the transaction payments may exceed the amount of margin collateral. There shall be no advance notification of required collateral value or collateral ratios as they vary depending on the financial position of the protection buyer. CDS transactions carry the risk of losses owing to changes in the credit position of some or all of the referenced entities, and/or fluctuations of the interest rate market. The amount the protection buyer receives in the event that the CDS is triggered

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by a credit event may undercut the total amount of premiums that he/she has paid in the course of the transaction. Similarly, the amount the protection seller pays in the event of a credit event may exceed the total amount of premiums that he/she has received in the transaction. All other conditions being equal, the amount of premiums that the protection buyer pays and that received by the protection seller shall differ. In principle, CDS transactions will be limited to financial instruments business operators and qualified institutional investors.

Transfers of equities to another securities company via the Japan Securities Depository Center are subject to a transfer fee of up to ¥11,000 (tax included) per issue transferred depending on volume. No account fee will be charged for marketable securities or monies deposited.

Nomura Securities Co., Ltd.

Financial instruments firm registered with the Kanto Local Finance Bureau (registration No. 142)

Member associations: Japan Securities Dealers Association; Japan Investment Advisers Association; The Financial Futures Association of Japan; and Type II Financial Instruments Firms Association.

The Nomura Group manages conflicts with respect to the production of research through its compliance policies and procedures (including, but not limited to, Conflicts of Interest, Chinese Wall and Confidentiality policies) as well as through the maintenance of Chinese Walls and employee training.

Additional information regarding the methodologies or models used in the production of any investment recommendations contained within this document is available upon request by contacting the Research Analysts listed on the front page. Disclosures information is available upon request and disclosure information is available at the Nomura Disclosure web page:

http://go.nomuranow.com/research/globalresearchportal/pages/disclosures/disclosures.aspx

Copyright © 2020 Nomura. All rights reserved.

Disclosures as of 10-Mar-2020.

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