Wed, Jul 30, 2014 - Page 14 News List

Yuanta Securities aims to expand into major player

AMBITIOUS:The Taiwanese brokerage has its sights set on Southeast Asia, with the acquisition of a South Korean firm set to open access to emerging markets

By Crystal Hsu  /  Staff reporter

Yuanta Securities Co (元大寶來證券), the nation’s largest brokerage by market share, plans to expand into Southeast Asia in line with its ambition to grow into a regional player after acquiring a majority stake in a South Korean peer, vice chairman Huang Guh-bin (黃古彬) said yesterday.

The main unit of Yuanta Financial Holding Co (元大金控) has authorized a financial consultancy to scout for acquisition targets on its behalf in Singapore, Myanmar and Vietnam to capitalize on those countries’ rapid economic growth, Huang said.

While emerging markets promise great business potential, they are prone to volatility and the company will factor in risks involved before reaching a decision, he added.

“We are looking for acquisition targets that would allow Yuanta Securities to have 100 percent control, not just chances for strategic partnership or capital investment,” Huang said on the sidelines of a product launch.

The brokerage is on course to integrate South Korea’s Tongyang Securities Inc and rename it Yuanta Securities later this quarter, so it can take advantage of Tongyang’s overseas units to expand in Cambodia and the Philippines, in addition to the South Korean market.

Tongyan owns a subsidiary in Cambodia and a savings bank in the Philippines, giving Yuanta Securities immediate access to the two emerging markets.

Yuanta Financial is also interested in growing its banking arm, Yuanta Commercial Bank (元大銀行), but is to maintain the status quo in the foreseeable future for its life insurance subsidiary, Yuanta Life Insurance Co (元大人壽), another executive said on condition of anonymity.

The conglomerate posted NT$6.04 billion (US$201.6 million) in net income for the first six months of this year, a jump of 79.19 percent from the same period last year, data on its Web site showed.

The figure translates into earnings per share of NT$0.61, compared with NT$0.32 a year earlier.

Huang attributed the earnings pickup to a series of regulatory relaxations that have helped the local bourse to almost emerge from the disruptions caused by the imposition of a capital gains tax on securities transactions, although the stalled ratification of the cross-strait service trade pact is causing uncertainty, he said.

Once the stalemate is resolved, Yuanta Securities would be able to tap the Chinese market from the city of Shenzhen, Huang said.

KGI Securities Co (凱基證券), another leading brokerage firm in Taiwan, on Monday announced plans to partner with Chinese tourism group Jin Jiang International Co (錦江國際) in setting up a securities company in Shanghai.

The forthcoming brokerage would have capital of 800 million yuan (US$128 million), with KGI to own a 51 percent stake, it said in a stock filing, adding that the two sides have inked a memorandum of understanding on the matter.

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