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Reporting from Singapore- In an attempt to capitalize on an increase in dealmaking in the region despite a weak domestic market, a division of state-owned brokerage China Galaxy Securities (CGS) wants to grow its investment banking team in Southeast Asia to 50 employees by the end of the year, according to a senior executive.
Jason Saw, CGS International Securities’ group head of investment banking, said the company is also applying for a license to help manage initial public offerings (IPOs) in Malaysia.
As per Saw in a Reuters interview, Singapore-based CGS International has acquired investment banking business licenses in Indonesia, Malaysia, Singapore, and Thailand during the past 1-1/2 years.
“The new people that we are onboarding are actually more to build our ASEAN-China relation to cater to Chinese enterprises to go into Southeast Asia,” he stated.
According to Saw, CGS International is focusing on agreements about China-Southeast Asia relations, dual listings, and mid-market deals worth S$200 million (US$149 million) to S$1 billion (US$744 million) in Southeast Asia by utilizing its parents, CGS and China Investment Corp.
Chinese strategic investors and funds looking to develop and diversify their investments in Southeast Asia are showing more interest in CGS International, whose parent company CGS is a subsidiary of China Investment Corp, a sovereign wealth fund, according to Saw.
Certain Chinese financial services companies have expanded into Southeast Asia because of weaker capital markets and dealmaking activity in mainland China and Hong Kong brought on by a slowing Chinese economy and escalating geopolitical tensions.
According to LSEG data, the total deal value in China fell by 25% in the first half of this year to US$108 billion, the lowest since the same time in 2012. Meanwhile, merger and acquisition operations increased by 16% worldwide.
Conversely, Griffith University research from 2023 shows that China’s outbound investments into Southeast Asian countries increased by 27% from the previous year, with Indonesia being the largest beneficiary.
Earlier this month, China International Capital Corp announced its intention to create offices in Malaysia and Indonesia.
On its website, CGS International stated that in addition to investment banking, it provides a comprehensive spectrum of financial services in more than 15 countries, including wealth management, shariah-compliant financing, structured products, and prime brokerage services.
Saw claims that CGS International already possesses asset management licenses in Singapore, Malaysia, and Thailand. Although the company is interested in Vietnam, it will initially collaborate with “established partners” in that country.
The company changed its name from CGS-CIMB Securities to CGS-CIMB Securities in April of this year after its parent company, CIMB Group, fully acquired the joint venture in 2023. The joint venture was established with Malaysia’s second-largest lender in 2018.
- Published By Team Genuine Reporter