Can DOCOMO, which was late to the game, turn things around?… “New NISA” accounts wanted even if they are prepared to lose money.

Monex’s “New NISA” account was essential for the growth of the “docomo Economic Bloc

The capital and business alliance between NTT DOCOMO and Monex Group announced on October 4 was a last-minute choice with the “New NISA” in mind. This is because the new NISA will be a decisive factor in the competition not only in the financial industry, but also in the “economic sphere” centered on major carriers. Let us explain the reasons for this and predict the services of the DOCOMO-Monex alliance to be announced in the future.

The background of NTT DOCOMO’s acquisition of Monex, Inc. was, as has been widely said, DOCOMO’s lagging financial business. However, what finally pushed DOCOMO to acquire Monex at a higher price than the original corporate value was probably the “New NISA,” which will start in January 2012. The new NISA account will be indispensable for the growth of the “docomo economic zone.

As the name implies, NISA (small amount investment tax exemption) is a government program that reduces taxes (tax rate of approximately 20%) on investment income to zero. The new NISA, which will start in January 2012, will offer much more favorable tax treatment than the current NISA. The new NISA has two investment limits: a “growth investment limit” for investing in stocks and investment trusts, and a “savings investment limit” for accumulating investments in investment trusts, which can be used together to invest up to 3.6 million yen per year. The annual limit of the current NISA was 1.2 million yen for the “general NISA” and 400,000 yen for the “savings NISA” (they cannot be combined).

This investment limit is set at 18 million yen, which can be reused if a portion is sold. For example, if one sold shares worth 1 million yen invested after reaching 18 million yen, the investment limit would be reduced to 17 million yen and a new investment of 1 million yen could be made. Most ordinary households, except perhaps for a few wealthy individuals, should be able to manage their assets with the new NISA alone. This means that, in the future, money invested by individuals will not “flow” to any account other than the New NISA.

The “New NISA” will accelerate the “shift from savings to investment”… Individual asset management will be completed only with the “New NISA”.

The “Asset Income Doubling Plan” formulated by the government in November 2010 calls for doubling the total number of NISA accounts from 17 million to 34 million and doubling NISA purchases from 28 trillion yen to 56 trillion yen in five years. This is not a typical national desk calculation, and in the six months since the announcement, the total number of accounts has already reached 19.4 million and the purchase amount 32.8 trillion yen. Considering the upcoming launch of the new NISA, it is even possible that the goal will be achieved ahead of schedule.

Furthermore, as of the end of June 2011, personal financial assets totaled ¥211.5 trillion, with cash and deposits still accounting for more than 50%. There is still room for growth. The new NISA account will be a powerful long-term attractor of individual money.