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LONDON - From ketchup to hot drinks, family-run investment firms are shaking up the consumer deals market, squeezing out private equity players and forcing them to change strategy.
BEIJING/HONG KONG - China reiterated its opposition on Thursday to a European Union plan to limit airline carbon dioxide emissions and called for talks to resolve the issue a day after its major airlines refused to pay any carbon costs under the new law.
China's Haitong may raise over $1.5 billion in Hong Kong
SHANGHAI (Reuters) - Haitong Securities (600837.SS) may raise more than $1.5 billion in a Hong Kong share sale, as China's second-biggest publicly traded brokerage joins larger rival Citic Securities (600030.SS) in tapping overseas investors to fund regional expansion.
The size of the Hong Kong initial public offering (IPO) would be no more than 13 percent of its total share base after the IPO, and could be upsized to 15 percent via an overallotment option, Haitong said in a statement to the Shanghai Stock Exchange on Tuesday.
Based on Haitong Securities' existing share base of 8.2 billion shares and its current share price of 9.83 yuan a share, the company could raise over 10 billion yuan ($1.5 billion) from the IPO. Haitong has a market value of $12.9 billion.
"A listing in Hong Kong will help accelerate the globalization of Chinese brokerages," said Cao Xuefeng, head of research at Huaxi Securities in Chengdu.
China's stock-broking industry is expected to consolidate further, and a strong capital position will enable Haitong and Citic to take advantage of that and cement their market leader positions, analysts said.
"The concentration rate of the sector will continue to climb. We expect more mergers and acquisitions in the industry over the next three to five years," said Cao.
GROWING HONG KONG PRESENCE
Haitong said the funds raised would be used to shore up its capital base as well as for domestic and overseas investments.
Haitong and Macquarie (MQG.AX), Australia's biggest listed investment bank, have held talks about a possible joint venture, a person with direct knowledge of the matter told Reuters earlier this month.
Haitong International Holdings Ltd, Haitong's Hong Kong unit, plans to double its investment banking headcount, aiming to underwrite more initial public offerings this year, Chief Executive Lin Yong told Reuters this month.
Chinese brokerages are stepping up their presence in Hong Kong. Some have set up subsidiaries there, as they bet that China's further deregulation of its capital markets, and Beijing's yuan internationalization plan would help boost their overseas businesses.
Citic Securities, China's top brokerage, is also preparing to list shares in Hong Kong in a roughly $2.7 billion deal.
Citic Securities plans to sell up to 10 percent of its enlarged capital base to overseas investors in the IPO.
Haitong said on Tuesday its first-quarter net profit rose 17 percent from a year ago to 1.2 billion yuan. Net profit was down 19 percent in 2010 to 3.7 billion yuan.
($1 = 6.528 yuan)
(Additional reporting by Fayen Wong; Editing by Kazunori Takada and Muralikumar Anantharaman)
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