CIMB plans to formalise tie-up with China Galaxy by the second quarter

Sources said that CIMB was looking at acquiring Jupiter Securities mainly to get an additional licence for its stock broking business that would eventually merge with China Galaxy Securities as part of a wider exercise to expand its reach and reduce cost. At the moment, CIMB already has a stock broking licence under its investment bank (IB). However, sources said it required another licence for the JV company that it is setting up with China Galaxy Securities to operate in Malaysia

PETALING JAYA: CIMB Group Holdings Bhd is targeting for its agreements with regard to its strategic partnership in the stockbroking business with China Galaxy International Financial Holdings Ltd (CGIF) to be executed by the second quarter of 2017.

In a filing with Bursa Malaysia yesterday, CIMB said China Galaxy Securities Co Ltd, the parent of CGIF, had announced the passing of resolutions by its board of directors in connection with the proposed partnership through the Shanghai Stock Exchange and the Stock Exchange of Hong Kong on March 24.

“CIMB notes this positive development and will continue its discussions with China Galaxy International on the proposed partnership, with a target to execute the definitive agreements by 2Q17,” CIMB, the country’s second largest lender said.

On Oct 17, 2016, the banking group announced a proposal to enter into a strategic partnership with China Galaxy International involving the cash equities business comprising institutional and retail brokerage, equities research and associated securities businesses.

Toward this end, it had a signed a heads of terms agreement with China Galaxy to explore a 50:50 joint venture (JV).

StarBiz had reported recently that CIMB was looking to buy Jupiter Securities, one of the smaller local brokerages, for more than RM50mil as part of a larger corporate exercise to facilitate a joint venture with China Galaxy Securities.

This was later confirmed by Olympia Industries Bhd which said that it had plans to dispose of its financial services arm Jupiter Securities. However, it did not release further details pending finalisation of the deal.

Olympia, which also has businesses in gaming and property, said in a stock exchange filing that discussions have been entered with interested parties.

It added that the necessary announcement will be made upon finalisation of the terms of the proposed disposal.