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November 27, 2007 |
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CITIC SECURITIES: Eyes Listing in Hong Kong CITIC Securities Co Ltd (600030.SS: Quote, Profile, Research) is considering listing in Hong Kong in the wake of its pioneering joint venture agreement with U.S. investment bank Bear Stearns Co Inc (BSC.N: Quote, Profile, Research), Reuters says, citing a Financial Times report on Monday. According to Reuters, FT quoted Citic Securities Chairman Wang Dongming as saying that an offshore listing for Citic, the securities arm of Citic Group, would help to make it a truly global firm. Mr. Wang, according to the report, said that there were still several serious issues to be considered before a final decision on a Hong Kong listing could be made. These issues, the report noted, include the Hong Kong Stock Exchange's requirement that listings in the territory must cover a minimum of 15% of issued share capital. In addition, the Chinese government requires all companies listing outside mainland China to hand over 10% of the proceeds to the national social security fund, the newspaper said, adding this would cost Citic Securities about CNY5 billion (US$668 million), based on its current share price in Shanghai. The report said that Citic Securities has been increasing its earnings fast and expects to continue growing, but according to Mr. Wang, there was an artificial element to valuations in China. "Everyone is over-enjoying their market capitalisation," he said. "We know these high multiples can't last forever." State-owned conglomerate CITIC Group -- http://www.citic.com/wps/portal/ -- oversees the government's international investments, as well as some domestic ones. Its approximately 45 subsidiaries on four different continents include financial institutions -- more than 80% of its assets -- industrial concerns (satellite telecommunications, energy, manufacturing), and service companies (construction, advertising). Holdings include stakes in CITIC Securities and CITIC International Financial Holdings. The Troubled Company Reporter-Asia Pacific reported that on Feb. 13, 2007, Standard & Poor's Ratings Services said that it had removed the BB+ long-term and B short-term foreign currency counterparty credit rating on CITIC Group from CreditWatch. The outlook on the ratings is developing. At the same time, Standard & Poor's also removed the BB+ foreign currency issue rating on the group's senior unsecured debt from CreditWatch. |
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