Mainland companies are keen to seek opportunities for acquiring Hong Kong stock brokerages following the Shanghai-Hong Kong Stock Connect scheme's launch on Nov 17. Parker Zheng / China Daily

Mainland firms bank on scheme to build up their foreign platforms in the SAR

The launch of the Shanghai-Hong Kong Stock Connect scheme on Nov 17 has whetted the interest of mainland companies in acquiring Hong Kong stock brokerages to enable them to take full advantage of the opportunities arising from the "through-train" program.

Shenzhen-based Realord Group said earlier it had made an offer to acquire Hong Kong's Manureen Securities Ltd, formerly known as Legarleon Securities. Manureen is licensed by Hong Kong's Securities and Futures Commission to trade in securities.

Stock analysts said the timing of the acquisition shows that Realord, like many other mainland securities firms, is keen on taking advantage of the potential benefits brought about by the cross-trading program. They predicted that after the acquisition, Manureen will introduce services for customers to buy and sell shares in Hong Kong and Shanghai.

Realord Group is not the only mainland company seeking to benefit from the opening up of the mainland's capital market.

In April, just after the announcement of the Stock Connect program, Sinolink Securities said it would acquire Guangdong Securities and Guangdong Financing in Hong Kong. In June, Southwest Securities made known its interest in acquiring Hong Kong's Tanrich Financial Holdings Ltd. In July, Fosun Group completed its acquisition of Hani Securities of Hong Kong and, in September, State-owned Tianjin Binhai New Area Construction & Investment Group disclosed that it would buy a controlling 51-percent stake in CASH Financial Services Group.

"Since the launch of the Stock Connect program, more and more companies on the mainland have been searching for opportunities to acquire Hong Kong stock brokerages in a bid to establish business platforms in the city to grab a share of the northbound investment business," said Lu Weiqiang, vice-president of Batach-Sophia Investment Management, an investment management company based in Shenzhen.

It is widely seen that building up overseas platforms is an important way for mainland securities firms to enhance their core competitiveness and participate in international businesses.

An analyst from Qilu Securities said: "The acquisition of Hong Kong stock brokerages is beneficial to mainland companies, as it will provide them with ready overseas platforms. Otherwise, they (mainland companies) would need to spend time and money to establish a presence in Hong Kong."

sally@chinadailyhk.com

(HK Edition 11/26/2014 page9)