Money

Citic may near a Sino-French brokerage venture

(Agencies)
Updated: 2010-04-19 14:54

Citic Securities Co, China's largest brokerage by market value, and France's Credit Agricole SA are nearing an agreement to form a global brokerage venture, including China and the Asia Pacific region, said four people with knowledge of the matter.

The alliance would include assets worth more than 3 billion euros ($4 billion), one of the people said, declining to be identified before an announcement that may come today. It involves CLSA Asia-Pacific Markets, 65 percent owned by Credit Agricole, forming a Chinese joint venture in stock sales and institutional broking with Citic Securities, the people said.

Teaming up with Citic Securities, which has ranked first or second in China since 2006 in underwriting stock sales, will help CLSA leapfrog rivals including Goldman Sachs Group Inc in the world's fastest-growing major economy. Partnering with CLSA, rated Asia's best brokerage in Asiamoney's 2009 survey of institutional investors, may boost Citic Securities's attempts to expand outside China.

"It seems Citic is teaming up with a strong partner in the Asia Pacific region, speeding up its international plan," said Liang Jing, a Shanghai-based analyst at Guotai Junan Securities Co. "Over the long term, it's definitely a favorable step."

'Important' talks

Citic Securities suspended trading of its shares in Shanghai on April 16, saying it's holding "important" talks.

Under the plan, Credit Agricole would sell a stake in CLSA in exchange for a share of the new company, which will be partly owned by Citic, two of the people said. Citic Securities and Credit Agricole's corporate and investment bank plan to announce a memorandum of understanding today, they said.

In China, Beijing-based Citic would replace Hunan-based Fortune Securities Co as the domestic partner for CLSA, two of the people said. Citic Securities got 99 percent of operating profit from the country last year.

Citic Securities and CLSA have been in talks about an alliance for more than two years, one of the people said.

Raymond Tang, a spokesman at Citic Securities, and Anne- Sophie Gentil, a spokeswoman for Credit Agricole, France's largest bank by branches, declined to comment. Fortune Securities officials couldn't be reached.

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