HSBC China se­cu­ri­ties JV to quadru­ple re­search cov­er­age

The Star Malaysia - StarBiz - - Foreign News -

HONG KONG: HSBC plans to quadru­ple the num­ber of main­land Chi­nese com­pa­nies covered by re­search from its China joint ven­ture over the next two years as it seeks to take ad­van­tage of its head­start as the first in­ter­na­tional bank to have ma­jor­ity con­trol of its main­land se­cu­ri­ties firm.

Shen­zhen-based HSBC Qian­hai Se­cu­ri­ties, run in con­junc­tion with a lo­cal gov­ern­ment in­vest­ment ve­hi­cle hold­ing 49%, be­gan op­er­at­ing a year ago of­fer­ing eq­uity and debt un­der­writ­ing, re­search and broking as well as M&A ad­vice and in­vest­ment ad­vi­sory work.

In ad­di­tion to the 280 Chi­nese com­pa­nies covered al­ready by the bank, HSBC Qian­hai has added more than 80 main­land-listed stocks since it opened, and plans to have ex­panded that to 400, ac­cord­ing to Irene Ho, chief ex­ec­u­tive of HSBC Qian­hai, in an in­ter­view with Reuters.

“We ex­pect to get to 400 in two years there or there abouts,” Ho said.

HSBC is work­ing to take ad­van­tage of what ex­ec­u­tives be­lieve is a three-year head­start on in­ter­na­tional ri­vals be­cause of its ma­jor­ity con­trol, which it gained by virtue of rules favour­ing Hong Kong busi­nesses.

Last Fri­day UBS be­came only the sec­ond bank to gain ap­proval for 51% con­trol un­der a broader re­lax­ation of fi­nan­cial-sec­tor own­er­ship by Beijing.

The open­ing up of China’s fi­nan­cial sec­tor prom­ises huge op­por­tu­ni­ties for in­ter­na­tional play­ers, un­til now mostly op­er­at­ing on the mar­gins of main­land mar­kets.

An­a­lysts at UBS have forecast that for­eign banks could quadru­ple their rev­enues from bro­ker­age in China by 2025 if the trend of mar­ket open­ing con­tin­ues. Last year, for­eign­ers took 1.3% of the to­tal fee pool, ac­cord­ing to the UBS re­port, pub­lished in June.

Banks have been beef­ing up their re­search teams in re­cent years and mar­ket lead­ers such as Gold­man Sachs, Cit­i­group , Mor­gan Stan­ley, UBS, and Credit Suisse, pro­duce re­search on be­tween 150 and 400 listed Chi­nese com­pa­nies each. — Reuters

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