China Merchants Securities, the mainland's No 6 brokerage by market share, is considering raising about US$1 billion in a Hong Kong listing or via a private placement next year, to fund its fast-growing business.
People briefed on the matter told the South China Morning Post that Wang Yan, who was appointed chief executive of Shenzhen-headquartered China Merchants Securities late last year, said at a recent internal staff meeting that he is keen to boost the company's capital significantly.
Raising capital for China Merchants Securities, which has been listed in Shanghai since late 2009, is part of Wang's ambition to transform the brokerage into a stronger rival to other Chinese investment banks such as BOC International.
Before Wang joined the securities company he was chief executive of Hong Kong-headquartered BOC International, the investment banking arm of Bank of China, one of the mainland's 'big four' state lenders.
According to people familiar with Wang's thinking, the new CEO prefers a Hong Kong listing to raising money via a private placement that would mainly be taken up by its existing shareholders, including its parent China Merchants Group.
Initially established in the late Qing dynasty to build warships to fight foreign invaders, the century-old industrial parent also controls China Merchants Bank, the mainland's sixth-largest bank by assets.
'A new boss usually has new ideas and an IPO [initial public offering] in Hong Kong will naturally raise the profile of both the company and the new boss,' said one of the people who declined to be identified because the plan hasn't officially been made public yet.
