BEIJING, June 10 (Xinhua) -- Haitong Securities (600837.SH) and Nanjing Securities (601990.SH) announced late Tuesday they were approved by the Chinese securities regulator to offer at maximum private placements of 20 billion yuan and 6 billion yuan respectively, reported Shanghai Securities News Wednesday.
Market watchers said the regulatory approval indicated pleasant chances for securities brokers to finance via private placement currently.
A rough survey showed that nine listed securities brokers have amended their private placement plans or rolled out new private placement schemes since February when China loosened securities issuance rules for listed companies.
The securities brokers, namely, Haitong Securities, China Securities (601066.SH), First Capital (002797.SZ), Western Securities (002673.SZ), Central China Securities (601375.SH), Nanjing Securities, Guosen Securities (002736.SZ), Southwest Securities (600369.SH) and Zheshang Securities (601878.SH), mulled to raise in total 90 billion yuan via private placements.
Among them, Haitong Securities, Guosen Securities, China Securities and Zheshang Securities each intended to finance more than 10 billion yuan via their planned private placements.
Apart from these, rights offerings became another important funding channel for securities brokers in China. By far, three listed securities brokers, namely Sealand Securities (000750.SZ), TF Securities (601162.SH) and Soochow Securities (601555.SH) financed aggregately 15.1 billion yuan via rights offerings this year. Three more securities brokers such as China Merchants Securities (600999.SH), Hongta Securities (601236.SH) and Shanxi Securities (002500.SZ) also released their plans of rights offering totaling 26.8 billion yuan.
Others securities brokers chose to sell convertible bonds to boost liquidity. Huaan Securities (600909.SH) issued 2.8 billion yuan of convertible bonds this year. Caitong Securities (601108.SH), Chinalin Securities (002945.SZ) and SDIC Capital (600061.SH), parent of Essence Securities, are mulling to sell convertible bonds.
Despite their diversified financing choices, securities brokers all poured or planned to pour their proceeds into asset-heavy business such as capital intermediary and investment transaction business.
According to Haitong Securities' private placement plan, the firm decided to put 10 billion yuan of the proceeds into fixed income, currencies and commodities (FICC) business and 6 billion yuan into capital intermediary business, which all together would account for 80 percent of its planned 20 billion yuan private placement.
For Nanjing Securities, it aimed to use no more than 2.5 billion yuan of proceeds from its future private placement to expand capital intermediary business and up to 2.5 billion yuan to foster investment of its self-operated business.
As He Nanye, an investment bank expert, held that securities brokers have rushed to finance and boost their liquidity this year as they are optimistic about future market performance and low interest rate and ample liquidity meant good opportunities for their bond and rights offering.
For them, boosting capital adequacy and liquidity mattered much for improving their competitiveness as capital intermediary business was highly likely to be their core business alongside development of the sci-technology innovation board and progresses in advancing registration-based stock issuance reform on ChiNext market in China, He added. (Edited by Duan Jing with Xinhua Silk Road, duanjing@xinhua.org)
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