Dealing licence for S African bank

NEDFINANCE (Asia), the Hong Kong banking arm of South African bank Nedcor, has been granted a securities dealing licence by the Securities and Futures Commission.

After being in business in Hong Kong for nearly 10 years as a trade finance house, with 55 staff in its Convention Plaza offices, the company can now dramatically upgrade its operations in the region.

''Getting the licence means we can go out and actively promote our business and offer clients a far wider range of on-the-ground services,'' said NedFinance managing director, Nick Burton.

South Africa operates a two-tier exchange rate system, with the financial rand being used to attract overseas investors. It trades at a discount to the commercial rand.

With a large client base already established, Mr Burton expects an influx of Chinese and other customers keen to invest in South African bonds and shares through the financial rand.

''Chinese investors are keen investors in South African bonds via the financial rand, because with income payable in commercial rand, they can currently get an effective yield of about 19 per cent,'' Mr Burton said.

''Through NedSecurities (Asia) we can now offer South African equities, bonds and unit trusts, while through NedFinance (Asia) we will continue to provide high-quality trade finance, treasury and private banking services''.

Operating as a deposit-taking company in the past, NedFinance was obliged to refer all clients requesting the bulk of these services to the head office in Johannesburg.

As South African trade with Hong Kong and China expands - exports and imports are worth $9 billion annually - the volume of banking business is expected to increase.

South Africa exports precious metals, base metals and minerals such as gold, coal and iron ore. Exports to South Africa include clothing, watches and electronic goods.

''Now that South Africa is being perceived as an investment opportunity, we want to capture the new awareness of the country as it opens up,'' said Mr Burton. ''We are also looking at opportunities for expansion elsewhere in the region.''