China to form brokerage with US$86 billion assets by merging firms

TWO state-backed brokerages in Shanghai have unveiled plans to merge, creating a US$86 billion firm and advancing Beijing’s ambition to forge investment banks capable of competing with Wall Street’s elite.

Orient Securities intends to acquire a 100 per cent stake in Shanghai Securities via a mix of A-share issuance and cash, according to a Sunday (Apr 19) filing with the Shanghai Stock Exchange.

The deal marks the latest step in an overhaul of China’s financial landscape. The combined entity held assets of approximately 583 billion yuan (S$109 billion) as at year-end 2025, according to the most recent financial disclosures. That puts it in the top ten of China’s brokerages in terms of assets.

The proposal follows the 2024 merger that created Guotai Haitong Securities, signalling a sustained trend towards mergers within the sector. Beijing is trying to develop its domestic investment banks to allow them to compete with global heavyweights such as Goldman Sachs and Morgan Stanley.

Trading of Orient Securities’ A-shares will be suspended from Monday for a period of up to 10 trading days, according to the filing. A Bloomberg gauge of Chinese brokerages rose 1.6 per cent in Hong Kong early morning trade, bucking a broader market decline.

Orient’s largest shareholder is Shenergy Group, which held a 26.6 per cent stake at the end of 2025, while Shanghai Securities is 50 per cent owned by Bailian Group, according to their latest financial reports. Both those entities are owned by Shanghai’s state-owned assets administrator.

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Soochow Securities expects Shenergy to remain the largest shareholder of the new entity, which will build on Orient’s strength in wealth and asset management as well as Shanghai Securities’ extensive brokerage network and client base, analysts led by Sun Ting wrote in a note on Sunday.

While the authorities have mulled combining the largest state-run investment banks for years, progress was slow until President Xi Jinping urged regulators in 2023 to push the consolidation of the industry into a few large brokerages. The securities watchdog also voiced its support for the move, with the goal of having two to three banks that can compete globally by 2035.

The momentum has picked up recently, with Guotai Haitong forming the largest broker and China International Capital following with a plan to absorb two smaller rivals in a deal worth a combined US$16 billion. BLOOMBERG