CICC, China Investment Securities in possible merger talks

[BEIJING] Investment bank China International Capital Corp and brokerage China Investment Securities, firms with 186 billion yuan (S$37.6 billion) of assets last year, are in talks on a possible merger, people familiar with the matter said.

There's no certainty the talks will lead to a transaction, and the structure of any deal is yet to be decided, the people said, asking not to be identified because the discussions are private.

CICC's shares jumped on the news, trading as much as 3.7 per cent higher in Hong Kong. They were up 1.9 per cent as of 1.30pm local time.

Linking up could be "a good deal for CICC," said Lucas Wang, a Hong Kong-based analyst at First Shanghai Securities.

"CICC's strength has been with high net worth individuals and corporate clients; the network and mass-market client base of China Investment Securities will be a good fit."

Shenzhen-based China Investment Securities is fully owned by Central Huijin Investment, which is a unit of China's sovereign wealth fund and holds stakes in the nation's biggest financial institutions. Huijin owns 28.4 per cent of Beijing- based CICC, the companies' websites show.

CICC, which listed in Hong Kong in November, had 94.1 billion yuan of assets at the end of last year, while China Investment Securities had 92.2 billion yuan, according to the websites.

Sherry Tan, a spokeswoman for CICC in Beijing, declined to comment. There was no immediate response to an e-mail sent to the Beijing-based press office of Central Huijin's parent, China Investment Corp, and no one answered a call to China Investment Securities seeking comment.

BLOOMBERG