China Mer­chants Se­cu­ri­ties gets key S. Korea li­cense

China Daily (Hong Kong) - - BUSINESS - By CHAI HUA in Shen­zhen grace@chi­nadai­

China Mer­chants Se­cu­ri­ties Co Ltd, one of the coun­try’s big­gest bro­ker­ages by as­sets, has ob­tained of­fi­cial over­seas se­cu­ri­ties bro­ker­age li­cense in South Korea, mak­ing it the first main­land se­cu­ri­ties com­pany to get the green light.

The li­cense was ap­proved by South Korea’s Fi­nan­cial Ser­vices Com­mis­sion on June 29 and three days later the Chi­nese main­land opened Bond Con­nect with Hong Kong, the long-awaited plat­form that al­lows qual­i­fied over­seas in­vestors to ac­cess main­land in­ter­bank bond mar­kets with­out a quota lim­i­ta­tion.

An­a­lysts said that as a re­sult, the Shang­hai and Hong Kong-listed bro­ker­age could ex­pand its cur­rent ser­vices as an in­for­ma­tion con­sul­tant to sell­ing de­riv­a­tives and bonds from the main­land and Hong Kong mar­kets to South Korea’s in­sti­tu­tional in­vestors.

The fi­nan­cial ser­vices com­mis­sion said it hoped the Chi­nese bro­ker would be­come a bridge be­tween the two coun­tries’ fi­nan­cial mar­kets, fur- ther ex­pand­ing their M&A deals, bonds is­suance, IPOs and other in­vest­ment bank ac­tiv­i­ties in the fu­ture.

Shen­zhen-based China Mer­chants Se­cu­ri­ties said South Korea’s in­vest­ments into China’s A-share mar­ket has been in­creas­ing grad­u­ally since the open­ing of Shang­hai-Hong Kong and Shen­zhen-Hong Kong stock con­nects.

The Chi­nese bro­ker has to date been pro­vid­ing trad­ing plat­forms and mar­ket re­ports to South Korea’s se­cu­ri­ties bro­kers, and it stressed that its branch would con­tinue to work with the lo­cal firms, rather than com­pete with them, af­ter ob­tain­ing the li­cense.

China Mer­chants Se­cu­ri­ties said it ex­pected the cur­rent

ex­changes would con­tinue to ex­pand af­ter the open­ing of the bond con­nect, as some se­cu­ri­ties agen­cies and as­set man­age­ment com­pa­nies in South Korea were al­ready in talks with it to jointly de­velop more di­ver­si­fied in­vest­ment prod­ucts.

Luo Dongyuan, the head of trade and in­vest­ment busi­ness at Guo­tai Ju­nan Se­cu­ri­ties, said he be­lieved the ac­tive ef­forts by Chi­nese se­cu­ri­ties com­pa­nies to de­velop new busi­ness un­der the bond con-

nect would speed up the pace of their in­ter­na­tion­al­iza­tion.

He said that se­cu­ri­ties bro­ker­ages had pre­vi­ously used M&As to go abroad, but af­ter the start of the con­nect they could now par­tic­i­pant di­rectly in global trad­ing.

Qian Yu­jun, chair­man of UBS’s China strat­egy com­mit­tee, said both Chi­nese and for­eign se­cu­ri­ties agen­cies could ben­e­fit from the bond con­nect and they would play a sig­nif­i­cant role in fu­ture mar­ket mak­ing.

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