China's Biggest Brokerage Mergers to Take Place Amidst Regulatory Reforms
CICC, Galaxy merger expected to take place via share swap, securing backing from Chinese authorities in recent weeks. The combined entity, with 1.4 trillion yuan ($193 billion) in total assets, is set to surpass Huatai Securities as China's third-largest brokerage. Analysts have anticipated an acceleration in the consolidation of China's brokerage industry, with a focus on firms backed by state shareholders.
- The Chinese government's push for consolidation in the brokerage sector could lead to a more concentrated market with fewer players, potentially increasing competition and innovation among remaining firms.
- Will the merger of CICC and Galaxy strengthen Beijing's efforts to establish large and competitive domestic investment banks as a counterweight to global banks like Goldman Sachs?