What’s new: Leading securities firms China International Capital Corp. Ltd. (CICC) (601995.SH) and China Galaxy Securities Co. Ltd. (CGS) (601881.SH) denied market speculation of a merger.
In stock exchange filings Monday, the two firms said they had not received any information about the rumored merger from any government departments, regulatory agencies, or controlling shareholders.
State-owned Central Huijin Investment Ltd., CICC’s controlling shareholder and CGS’ actual controller, didn’t plan the rumored merger between the two brokers, both firms added.
The background: The merger speculation was sparked by a recent personnel reshuffle between CICC and CGS. Chen Liang, who resigned as CGS chairman last month, formally took office as CICC’s new chairman on Friday.
Beijing’s recent call for creating top-tier investment banks had also fueled the rumor. In late October, China’s top leadership pledged at the Central Financial Work Conference to foster first-rate investment banks. Soon after the meeting, the China Securities Regulatory Commission said that it will support leading securities firms in becoming first-rate investment banks through methods including mergers.
At the end of June, Central Huijin held a 40% stake in CICC, while Central Huijin-controlled China Galaxy Financial Holdings Co. Ltd. owned 50% of CGS, according to the securities companies’ interim reports. Central Huijin is the domestic arm of the country’s sovereign wealth fund, China Investment Corp.
Contact reporter Zhang Yukun (yukunzhang@caixin.com) and editor Bertrand Teo (bertrandteo@caixin.com)
Get our weekly free Must-Read newsletter.
