State asset management firms launch brokerages

Two of China’s four state asset coordinators, China Huarong Asset Management Corp (AMC) and China Cinda AMC, have launched securities brokerage divisions, the Shanghai Securities News reported. Huarong Securities was registered with capital of US$200.80 million (RMB1.51 billion), consisting of RMB1.5 billion from China Huarong AMC and RMB10 million from China Gezhouba Group. Cinda Securities was registered with capital of RMB1.511 billion, with RMB1.5 billion from China Cinda AMC, RMB9 million from Zhonghai Trust & Investment, and RMB2 million from China National Materials Industry Group. The central government founded the four asset management firms (the other two are Great Wall and China Orient) in 1999 to help clear non-performing loans from the balance sheets of the nation’s big four banks, but with that job well-advanced they have been looking to diversify into other businesses. China Orient has also won regulatory approval to enter the securities business; Dongxing Securities Co will be headquartered in Beijing with registered capital of RMB1.504 billion. The stock regulator said it will suspend approval of new brokerages following these three firms, but said it would allow foreign institutions to form joint-stock investment banks with local partners to facilitate their investment in mainland brokerages.