BIZCHINA / Weekly Roundup
Foreign investors eye futures market
(Xinhua)
Updated: 2007-02-26 10:00
As the Chinese government is considering easing control over foreign
investment in the futures sector, foreign investors are reportedly
rushing into talks with potential Chinese partners on possible mergers
and acquisition.
The Hong Kong-based securities brokerage CLSA is said to be in
negotiation with Xiangcai Qinian Futures, founded in 2004 with a
registered capital of 30 million yuan (3.9 million U.S. dollars), to
inject 20 million yuan for the company's stakes, according to Saturday's
China Business Newspaper.
Related readings:
Rules pave way for financial futures trading
Foreign players eye index futures Securities chief says market foundation
'not strong'
China reports robust growth in futures businesses
Without revealing the specific list of shareholding, the newspaper said
that Xiangcai Securities, the holding company of Xiangcai Qinian Futures,
was forced to sell the assets due to its financial crisis, but hoped to
maintain its share-controlling status.
If CLSA succeeded in its bid, Xiangcai Qinian would meet the minimum
capital requirement of 50 million yuan of registered capital for a
clearing member of China Financial Futures Exchange (CFFE).
CFFE, the first financial derivative exchange in China, was established
in September last year for the country's futures trading. Analysts
contended that the stock index future as China's first financial
derivative product was probably around the corner.
Chinese futures companies ranked among the last 50 are all potential
candidates for M&A from foreign institutions, says Liu Xu, a
macroeconomic policy analyst with Capital Futures Co., Ltd, as foreign
investors tend to purchase a physical entity at a relatively low cost to
engage in the futures business in China.
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