Banking News
- CITIC Securities eyes HK listing
Date: 27-Nov-2007 Sources: (Shenzhen Daily)
CITIC Securities Co., China's largest securities firm by market value, is considering listing in Hong Kong in the wake of its pioneering joint venture agreement with U.S. investment bank Bear Stearns Co., the Financial Times reported yesterday.
The newspaper quoted CITIC Securities chairman Wang Dongming as saying an offshore listing for the Shanghai-listed brokerage, the securities arm of CITIC Group, would help to make it a truly global firm.
'It would help us internationalize our mindset,'he said. 'If you list in Hong Kong, you become real.'
Wang said there were still several serious issues to be considered before a final decision on a Hong Kong listing could be made. These include the Hong Kong stock exchange's requirement that listings in the territory must cover a minimum of 15 percent of issued share capital, the report said.
In addition, the Chinese Government requires all companies listing outside the mainland to hand over 10 percent of the proceeds to the national social security fund, the newspaper said, adding this would cost CITIC Securities about 5 billion yuan (US$668 million), based on its current share price in Shanghai.
CITIC Securities has been increasing its earnings rapidly and expects to continue growing fast, but Wang said there was an artificial element to valuations in China.
'Everyone is over-enjoying their market capitalization,'he said. 'We know these high multiples can't last forever.'
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