Citic Securities eyes global targets with IPO cash

PUBLISHED : Friday, 09 September, 2011, 12:00am
UPDATED : Friday, 09 September, 2011, 12:00am


Citic Securities will use the funds from its planned US$2 billion Hong Kong initial public offering to transform itself into an international investment bank.

Hinting that it may even go on a global buying spree, the Bejing-backed broker said in a handout to analysts that it planned to use 65 per cent of the listing proceeds to 'establish or acquire' new research desks and sales and trading networks overseas, though it did not specify which countries it planned to enter.

Citic Securities, whose shares already trade in Shanghai, is stepping up its global ambitions at a time when many of its international competitors are slashing jobs because of the lacklustre US economy and sovereign debt crisis in Europe.

HSBC said earlier this week it would shed 3,000 staff in Hong Kong as part of a plan to cut 25,000 positions worldwide. That represents around 10 per cent of HSBC's workforce as of June. Bank of America, Credit Suisse, Goldman Sachs and UBS have also announced job cuts.

While Citic Securities and its competitor, CICC, usually top the investment banking league tables on the mainland, it is uncommon for these government-owned institutions to try to compete outside their own turf.

Beijing-backed banks have long aimed to go global, but have yet to find a way of acquiring US or European rivals without causing a protectionist backlash abroad. According to diplomatic cables released on the WikiLeaks website, China Construction Bank outlined plans to buy a major US lender as long ago as 2008.

Now that the central government is taking steps to internationalise the yuan, however, mainland banks have even more reason to seek a bigger role in global financial markets.

Citic Securities also said yesterday that it would begin its formal IPO roadshow next Friday and list its shares in Hong Kong on October 6.

A Citic Securities spokesman declined to comment.

Additional reporting by Sophie Yu