Malaysian banking group CIMB and one of the largest Chinese securities companies, China Galaxy Securities, are negotiating a joint venture in the stockbroking business.
The two parties are said to have signed a heads of terms to explore a strategic partnership in the stockbroking business which will cover institutional and retail brokerage, equities research and associated securities businesses and to identify further areas of co-operation in the relevant markets where they each operate.
CIMB will continue to offer investment banking and capital markets products and services to its clients while the Joint Venture (JV) will operate the stockbroking business, providing an extensive equity distribution platform and research services to complement and support CIMB’s fully-owned investment banking business and capital markets businesses. Through this exercise, CIMB’s stockbroking business will effectively be repositioned as a pure play broker with the client base of a universal bank.
Capitalise on China-Outbound M&As
Tengku Dato’ Sri Zafrul Aziz (pictured below) Group Chief Executive, CIMB Group, said: «This partnership heralds the future for the stockbroking business. The model of the pure play JV broker working strategically with the bank is a hybrid model that paves the way for both parties to create stronger capabilities and depth to get ahead of the curve.»
Through the enhanced synergies and cross-selling opportunities the JV will open up opportunities for the3 parties to capitalise on China-outbound M&As and other capital market activities , as well as benefit from China’s focus on infrastructure development projects, such as the «One Belt One Road» project, which will facilitate further growth, consumption and capital flows into the region.
