Haitong Securities will focus on building an investment banking business after fully integrating with Taifook Securities.
Haitong took a 60 per cent stake in Taifook last year for HK$1.82 billion. Its Hong Kong arm will transfer all its business to Taifook and remain a holding company of the broker. As a result, all lines of businesses, including brokerage, asset management, market research and investment banking, will be combined.
The move would allow the two brokers to be rebranded into one company, Haitong International, and this could take place by the end of this year or early next year, said Lin Yong, chief executive at Haitong (Hong Kong) Financial Holdings, a subsidiary of the Shanghai-listed broker.
'We looked at the top 10 brokers in Hong Kong before making an offer for Taifook,' said Lin, who is also joint managing director of Taifook Securities Group. 'We even had colleagues coming over opening accounts at Taifook to see how things are done here. Our goal is to have a strong investment banking business.'
Haitong became the first mainland securities house to take a stake in a Hong Kong broker. The financial crisis had discouraged NWS Holdings, which sold its stake to Haitong, from allocating more resources to the broker, said Peter Wong, deputy chairman and managing director at Taifook.
Mainland securities houses such as Haitong have been looking to diversify from brokerages to more lucrative investment banking such as underwriting initial public offerings and arranging convertible bonds. The acquisition will help Haitong tap Taifook's institutional client base for future share sales and fund-raising.