China brokerage deal has more bark than bite

Guotai Haitong Securities Co

09/09/2024 04:58

(The author is a Reuters Breakingviews columnist. The opinions
expressed are his own.)
    By Hudson Lockett
       HONG KONG, Sept 9 (Reuters Breakingviews) - The merger
of Guotai Junan and embattled rival Haitong will create the
country’s largest brokerage with assets of $225 bln. The
overcrowded sector needs consolidation, but this deal probably
won’t aid Beijing’s goal to foster a squad of world-beating
investment banks.
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    CONTEXT NEWS
    Guotai Junan Securities plans to merge with Haitong
Securities through a share swap pending shareholder and
regulatory approval, per exchange filings on Sept. 5. The
combined entity will have assets of about 1.6 trillion yuan
($225 billion), outstripping industry leader Citic Securities.
    In March, China Securities Regulatory Commission head Wu
Qing said China would seek to create around 10 leading firms in
the sector by 2035, including two to three globally competitive
investment banks.

 (Editing by Antony Currie and Aditya Srivastav)
 ((For previous columns by the author, Reuters customers can
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hudson.lockett@thomsonreuters.com))