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August 5, 2013 12:05 pm
One of China’s largest securities brokers has acquired the commodities division of French bank Natixis in the latest move by a Chinese group to expand into overseas derivatives markets.
The Hong Kong branch of GF Futures, a division of Shenzhen-listed GF Securities, bought the Natixis unit at the end of July for slightly less than $40m in cash, according to an emailed statement and a person close to the deal.
The move is the latest sign of a concerted push among Chinese companies to expand into international commodities markets. Bank of China last year became a member of the London Metal Exchange, while ICBC has since last year been in talks to acquire the commodity trading business of Standard Bank.
The push comes amid hopes that Beijing will relax capital controls to allow greater participation of Chinese companies and individuals in foreign markets. Hong Kong Exchanges & Clearing last year paid £1.4bn to acquire the LME in an explicit bet on the trend.
“Clearly there are advances being made in the regulatory environment within China that perhaps mean you will see more business coming out of china into European and US markets,” said the person close to the GF Securities deal. “You are better placed if you have a foot in both camps.”
The deal also illustrates the shifting balance of power in commodities and finance, as Asian groups rise to take the place of struggling European companies. Natixis’s commodity broking unit has a long history in metals markets, dating back to the 1970s when it joined the LME under the name Sogemin, a unit of Union Minière, the Belgian metals group.
Natixis announced last year that it would close the unit, which contained the bank’s LME and other exchange-traded commodity broking activities, amid a liquidity crunch in the French banking sector that saw several others scale down their activities in raw materials. The unit’s principal attraction to GF was as a means of obtaining commodity market memberships and trading systems, the person familiar with the deal said.
GF Securities is China’s third-largest securities firm by market value, reporting profits of Rmb2.7bn ($440m) last year, according to the statement.
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