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在线翻译:
szdaily -> Markets -> 
Brokerages set for consolidation
    2020-09-24  08:53    Shenzhen Daily

CHINA’S securities broking sector is set for consolidation as stricter regulations covering financial holding firms force owners of mid-sized brokerages to divest, analysts and industry participants said.

Private finance houses have aggressively expanded into areas such as consumer finance and asset management, racking up enough debt to threaten market stability. In response, authorities have increased scrutiny and tightened capital requirements.

New rules, said Guosen Securities analyst Wang Jian, are accelerating mergers among brokerages in a sector where half had less than US$5 billion in assets each as of the end of 2019, from a total of US$1.1 trillion, showed Securities Association of China data.

“Once we’re in the trajectory of industry consolidation, it would force every brokerage to rethink its market position, and strive to find counterparts to merge and become stronger,” said UBS Securities non-bank financial industry analyst Cao Haifeng.

The latest instance of consolidation saw privately owned Changsha Yongjin Group on Sunday shedding its controlling stake in Sinolink Securities Co. to government-backed Guolian Securities Co.

Yongjin is also considering divesting its stake in another financial firm because it is unable to meet a new threshold for owning and operating financial services businesses, said a person with direct knowledge of the matter.

Yongjin did not respond to telephone calls or an email seeking comment.

The People’s Bank of China this month said, effective Nov. 1, companies must have at least 5 billion yuan (US$732 million) in capital to be licensed as a financial holding firm. Those with banking units need at least 500 billion yuan in assets.

Should a company fail to meet the requirements after a one-year grace period, the central bank can force a share sale.

Resulting consolidation will likely see brokerages backed by provincial governments buying privately owned rivals, analysts said.

Guolian, controlled by the government of eastern city Wuxi, acquired Sinolink to gain its investment banking team, said a government official.

In April, Tianfeng Securities Co. said it bought a controlling 26.5 percent of Hengtai Securities Co., formerly a unit of embattled Tomorrow Holdings Co. (SD-Agencies)

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