Cathay Securities Co (國泰證券) yesterday announced a plan to acquire Horizon Securities Corp’s (宏遠證券) subsidiary in Hong Kong for about HK$40 million (US$5.16 million), marking the latest overseas expansion made by its parent firm, Cathay Financial Holding Co (國泰金控).
It is the fourth acquisition Cathay Financial has announced in the past three months, indicating the financial holding company is gearing up for the “Asian league” charge encouraged by the government.
“The deal may help the company offer more diversified products to high net worth clients,” Cathay Securities spokesperson Michael Chen (陳俊昇) told a press conference.
In the short term, Cathay Securities might focus on businesses of depository, brokerage, foreign institutional investors (FINI) and margin trades between Taiwan and Hong Kong through the deal, Chen said.
In the long run, the brokerage is eyeing further development in the Shanghai-Hong Kong Stock Connect, with products related to the Renminbi Qualified Foreign Institutional Investor program (RQFII), and other business sectors in Hong Kong, he added.
The acquisition plan is still subject to final approval by the Financial Supervisory Commission (FSC) and Hong Kong’s Securities and Futures Commission (SFC).
However, Cathay Securities president Chuang Shun-yu (莊順裕) is confident that the acquisition will be completed in the second or the third quarter.
Horizon Securities (Hong Kong) Ltd, with capital of HK$85 million, had a net worth of HK$38.37 million at the end of last year.
The brokerage business has been the major sales and profit source for the company, followed by the sell-side and investment consulting business.
Currently, Cathay Financial has two subsidiaries in Hong Kong — a banking branch of Cathay United Bank Co (國泰世華銀行) and Cathay Conning Asset Management, a joint venture launched by Cathay Life Insurance Co (國泰人壽) and the US-based Conning Holdings Corp in Hong Kong in 2012.
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