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. The mainland's capital market does not operate the same way as international markets, something ambitious securities houses find frustrating when it comes to pricing a deal that is still tightly controlled by regulators. 'The procedure of underwriting an initial public offering in China is very different from in Hong Kong,' Lin said. 'When we worked on the Xinjiang Goldwind Science & Technology listing in Shenzhen, we just filed what the stock exchange required and that's pretty much it. We didn't have to be involved in investor roadshows, and for us, underwriting an IPO here in Hong Kong is an entirely different experience.' He said Haitong, which will participate in the Goldwind share sale in Hong Kong, was an underwriter for about 10 per cent of the listings on the mainland. The company hopes to advise mainland-listed companies to tap Hong Kong's equity market, to arrange bonds and to branch into private equity financing. The growth of the broker's asset management business following the acquisition is subject to regulatory reforms. Lin said Haitong had been pushing for further qualified foreign institutional investor quotas to gain more room to launch A-share products for Hong Kong investors.