SINGAPORE’s largest stockbroking group, UOB-Kay Hian Holdings Ltd, is acquiring the brokerage business of one of its smaller rivals, J.M. Sassoon & Co Pte Ltd, as the city-state’s broking industry consolidates.
The acquisition comes as Singapore stockbrokers face intense competition due to declining trading volumes and smaller profit margins after commissions were liberalised in October 2000. Following the liberalisation, local stockbrokerages have been scrambling to make acquisitions or forge mergers to survive.
UOB Kay Hian, the stockbroking unit of Singapore’s largest lender United Overseas Bank, said legal completion of the deal was expected on Feb 28. The company did not say how much it was paying for the business.
UOB Kay Hian is the biggest broking house in Singapore with more than 800 trading representatives or remisiers, followed by OCBC Securities, which has about 360 independent traders.
J.M. Sassoon is one of the smaller stockbroking houses with about 180 remisiers.
UOB Kay Hian’s net profit for the six months to June 2002 improved to S$14.38mil from S$9.37mil in the same period of 2001. For the full year of 2001, its net profit slumped 69% to S$16mil. – Reuters