Haitong International Securities, the international arm of China's second-largest brokerage, has proposed to raise more than HK$9 billion in a rights offering as it intends to expand its broking and margin lending businesses on the back of the country's pursuit of a market-led financial liberalisation. Its deputy chairman, Lin Yong, said in a statement to the Hong Kong stock exchange that the company plans to use about 60 per cent of the proceeds to scale up its broking and margin lending business in the upcoming Shenzhen-Hong Kong stock connect scheme. The first through train, connecting the Hong Kong and Shanghai stock markets, was launched in November. A Shenzhen-Hong Kong through-train scheme is expected to start in the second half of this year, potentially allowing foreign investors to buy small-cap stocks. A fifth of the proceeds from the rights issue will be used for expanding businesses in fixed income, currency, commodities, and equity derivatives, Haitong said. Haitong shares rose almost 30 per cent in the past year, compared with a 12 per cent increase in the Hang Seng Index. Each share will be eligible for one rights share at HK$3.50 apiece, or a discount of 33.71 per cent to yesterday's closing price of HK$5.28. The company is majority-owned by parent Haitong Securities, which raised US$3.9 billion in a share placement in January. On completion, the parent's holdings in the company will be lowered to 65 per cent, from 75 per cent. Haitong International bought London-based brokerage Japaninvest Group for US$20 million last October, a week after it raised HK$764 million worth of convertible bonds. Haitong International raised US$600 million in a five-year bond deal in September last year. That followed a HK$3 billion rights issue in April. In 2013, it raised more than HK$5 billion, including HK$1.2 billion from a rights issue in April, HK$1 billion from two convertible bond issues in July and October, and a revolving syndicated loan worth HK$3 billion.