CIMB, China Galaxy Se­cu­ri­ties ex­plore re­gional stock­broking tie-up

The Sun (Malaysia) - - MEDIA & MARKETING -

PETALING JAYA: CIMB Group Hold­ings Bhd and China Galaxy Se­cu­ri­ties Co Ltd (CGS) are ex­plor­ing a strate­gic part­ner­ship in the stock­broking busi­ness within the re­gion.

In a fil­ing with the stock ex­change, CIMB said its wholly owned sub­sidiary CIMB Group Sdn Bhd had inked a heads of terms with CGS’s wholly owned sub­sidiary China Galaxy In­ter­na­tional Fi­nan­cial Hold­ings Ltd for po­ten­tial part­ner­ship in the cash eq­ui­ties busi­ness com­pris­ing in­sti­tu­tional and re­tail bro­ker­age, eq­ui­ties re­search and as­so­ci­ated se­cu­ri­ties busi­nesses in the re­gion.

CIMB said the pro­posed 50:50 joint ven­ture (JV) is sub­ject to the ne­go­ti­a­tion and is tar­geted to ex­e­cute de­fin­i­tive agree­ments within three months.

CIMB will con­tinue to of­fer in­vest­ment bank­ing and cap­i­tal mar­kets prod­ucts and ser­vices to its clients while the JV will op­er­ate the stock­broking busi­ness, pro­vid­ing an ex­ten­sive eq­uity distri­bu­tion plat­form and re­search ser­vices to com­ple­ment and sup­port CIMB’s fully owned in­vest­ment bank­ing busi­ness and cap­i­tal mar­kets busi­nesses.

“Through this ex­er­cise, CIMB’s stock­broking busi­ness will ef­fec­tively be repo­si­tioned as a pure play bro­ker with the client base of a uni­ver­sal bank,” it ex­plained.

CIMB also said that the JV will see two lead­ers in their re­spec­tive mar­kets com­bine their ex­per­tise and reach to scale up and take the busi­ness to the next level.

For CIMB, it will be in an ad­van­ta­geous po­si­tion to cap­i­talise on China-out­bound merg­ers and ac­qui­si­tions and other cap­i­tal mar­ket ac­tiv­i­ties through en­hanced syn­er­gies and cross-sell­ing op­por­tu­ni­ties, as well as ben­e­fit from China’s fo­cus on in­fra­struc­ture devel­op­ment projects, such as the “One Belt One Road” pro­ject, which will fa­cil­i­tate fur­ther growth, con­sump­tion and cap­i­tal flows into the re­gion.

CIMB CEO Tengku Datuk Seri Zafrul Aziz Tengku Ab­dul Aziz said the model of the pure play JV bro­ker work­ing strate­gi­cally with the bank is a hy­brid model that paves the way for both par­ties to cre­ate stronger ca­pa­bil­i­ties and depth to get ahead of the curve.

“We are also con­fi­dent that with CGS as a part­ner in this JV, CIMB will be bet­ter placed to cap­ture the grow­ing trade and in­vest­ment flows with China,” he added.

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