Classifieds | Archives | Jobs | About TGT | Contact | Subscribe
 | 
Last updated 5 hours, 39 minutes ago
Printer Friendly Version | TGT@Twitter | RSS Feed |
HOME LOCAL MIDEAST ASIA WORLD BUSINESS SPORT OPINION WRITERS
China spending big in financial services
December 10, 2012
 Print    Send to Friend

LONDON: Analysts predict that Chinese firms have the chance to gradually build up teams and expertise rather than making giant acquisitions.

“They’ll be much more clever than simply buying moribund banks at high prices: they’ll be buying people,” said David Marsh, co-founder of a forum in London that connects central banks and sovereign wealth funds with banks and asset managers.

“What we’re seeing now is just the precursor of a much bigger shift that will take place over the next 10 years, but it won’t happen in one fell swoop.”

China has not been completely asleep on the acquisitions front.

Two Chinese private equity funds are on the final shortlist of bidders for the asset management arm of Franco-Belgian financial group Dexia, a deal that could be worth 500 million euros or more.

And CITIC Securities has agreed to buy CLSA Asia-Pacific Markets, a highly regarded Hong Kong-based brokerage, from its French parent, Credit Agricole SA, in a two-stage transaction worth $1.25 billion. The deal is symbolic. Whereas CITIC is China’s biggest brokerage, Credit Agricole is battling mounting losses in Greece, the epicentre of the euro zone crisis, where it owns the country’s sixth-largest bank, Emporiki.

“Distressed banks selling good assets always happens in a crisis like this. Banks which don’t want to raise capital by issuing new equity end up selling their offshore assets, and typically they sell the crown jewels,” said Ken Courtis, founding partner of Themes Investment Management and a former vice-chairman of Goldman Sachs Asia.

A clutch of other European financial institutions is also beating the retreat in Asia.

Britain’s Royal Bank of Scotland has offloaded some of its Asia-Pacific investment banking operations to Malaysia’s CIMB Group Holdings Bhd, while ING is selling its $7 billion Asia insurance business. Both banks had to be bailed out by their governments during the crisis.

Integrating independent-minded CLSA would be one of the biggest challenges for CITIC, Courtis said. Chinese financial institutions in general have a narrow bench of executives with the right linguistic and overseas management expertise - one reason why they are initially beefing up their offshore presence in more-or-less familiar Hong Kong, he said.

Reuters

Add this page to your favorite Social Bookmarking websites
Comments
 
Post a comment
 
Name:
Country:
City:
Email:
Comment:
 
    
    
Related Stories
UK may fail to find enough buyers for bond
LONDON: Britain is at increased risk of failing to find enough buyers at a government bond auction due to big day-to-day swings in market prices, the man responsible for ..
Calling time on zero rates and QE
LONDON: The world of zero interest rates has outlived its usefulness, according to a chorus of influential bankers, watchdogs and economists anxious about asset bubbles a..
Biggest splurge in decade
LONDON: British consumers finally look ready to spend like they used to, as lower prices for basics give them more money to eat out and travel, bolstering the economy aga..
Downward pressure on prices and interest rates
LONDON: For anyone expecting interest rates to be stuck near zero for years to come, the past month has been uncomfortable. The so-called “new normal” or “secular stag..
Investors struggle as new bond sales by ex-Soviet firms hit lows
LONDON: Bond sales by companies from Russia and other ex-Soviet countries have fallen to 10-year lows this year, inflating prices for new issues from other regions and le..
 
FRONTPAGE
 
GALLERY
 
PANORAMA
 
TIME OUT
 
SPORT
 
 
Advertise | Copyright