China Merchants Securities Co., Ltd.

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China Merchants Securities (CMS) is a subsidiary of China Merchants Bank (CMB), the sixth-largest bank in China.  The securities firm ranks ninth on the list of China's top brokerages.  The firm launched an initial public offering (IPO) in late 2008 after the approval of the China Securities Regulatory Commission.  CMS hoped that the IPO would enable it to raise enough cash to launch it even higher into the upper echelons of Chinese business.

QDII-approved

In September 2007, CMS became the second securities firm in China to have won the coveted status of qualified domestic institutional investor or QDII after China International Capital Corporation (CICC).  The five other securities firms which have QDII approval from the China Securities Regulatory Commission (CSRC) are CITIC Securities, Guotai Junan Securities, Orient Securities, Everbright Securities and Huatai Securities.  The CSRC has only allowed securities firms to invest in foreign securities markets since April 2006 when the QDII program was launched.  At first, investments were limited to fixed-income and money market products.  However, the CSRC expanded the definition of QDII in May 2007 to allow investment banks to invest in stock-related products with modest restrictions.

Subsidiary of a subsidiary

CMS handles its fund management through a joint venture with the Dutch financial firm ING Investment Management.  The firm is called China Merchants Fund Management (CMF), and it was the first Sino-foreign joint venture to receive formal approval to operate in mainland China.  CMF was founded in December 2002 as a collaboration between CMS, ING and three other companies: China Power Finance Company, China Huaneng Finance Company and China COSCO Finance Company.  However, in May 2007, China Merchants Bank bought out the three companies, leaving CMF evenly split three ways between CMB, CMS and ING.

Also headquartered in Shenzhen, most of CMF's business revolves around the launching of funds and fund management.  The firm is organized into nine main departments: investment management, investment trading, marketing, client services, IT, business development, supervisory and audit, general management and finance, and fund accounting.  In January 2008, CMF was also granted QDII approval by the CSRC.

High-flying IPO

Prior to the public debut of CMS, in December 2007, the firm received a purchase offer for 29.77 million shares from a domestic airline company, Hainan Airlines.  Hainan offered to buy the shares, representing an approximate 1 percent stake in CMS at RMB 20 per share for a grand total of RMB 595 million.  However, the purchase price is subject to adjustment if the IPO price comes significantly higher than Hainan Airlines' offer price.  Hainan Airlines will raise assets for the buy from its parent company, Grand China Airlines, the fourth largest airline in China.

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China Merchants Securities Co., Ltd.


Jiangsu Building
Block A, 38th Floor Yitian Road
Shenzhen 518026
Phone: +86-755-8319-8888
Fax: +86-755-8319-5109
www.cmbchina.com

STATS


  • Employer Type: Public
  • Chairman (China Merchants Bank): Qin Xiao

Major Office Locations

  • Shenzhen, China

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