In China a foreigner can thus hold up that 33 of a domestic broker

After more than a year of discussions, Credit Agricole CIB and Citic Securities, the largest Chinese broker, should reveal today, that they are working on a very ambitious project of alliance. According to our information, the two companies will unveil a letter of intent ("memorandum of understanding") providing for consolidation next in their forces in the business of brokering but also entries in their respective structures.

If the exact amounts of these investments still seem to be the subject of talks, the subsidiary funding and investment of the French Bank and the financial giant of Chinese State subsidiary Citic would be decided to take, each share of several hundreds of millions of dollars in the capital of their new partner. "We are talking about a sum very very important", blew this weekend an expert, who recalled that catch of participation must however take into account different national regulations. In China, a foreigner can thus hold up that 33 of a domestic broker. In partnering, the two groups hope to give birth to a true world leader in broker, able to compete with the American giants. The new structure should be one of the few in the world to provide a truly global service to its customers. Indeed, Citic Securities is one of the leaders of the brokerage in China, where he is involved in most major introductions in the stock market, while Credit Agricole has, to a presence of weight throughout Asia with CLSA (Credit Lyonnais Securities Asia, which it controls 90, in Europe and the Middle East (Cheuvreux), and finally the United States (CA Securities USA).) "With this agreement, agricultural credit goes to siniser and Citic is to internationalize," summarizes the record close. Subsidiary Credit Agricole with Société Générale, Newedge, specialized in the listed derivatives, transit is not however involved in the agreement.

For this service, the two partners, who must still definitely stop certain terms and conditions of this approximation (perimeter, funding, governance, etc.), have already agreed to base common umbrella structure, owned by Citic Securities and Credit Agricole CIB, which will host the various brokerage entities made by the two groups, while preserving the geographic dominant of each of the players.

Prospects for the Chinese market

For the Chinese, this agreement, if it succeeds, will mark a significant strategic shift. Very present on the Chinese market, as well as in Hong Kong, the Citic group has so far upsetting to internationalisation and, in particular, to expand its activities on other Asian exchanges. In October 2007, the company headed by very influential Wang Dongming believed able to initiate this conquest of foreign markets by partnering with Bear Stearns. But six months later, his crossed with American giant of the brokerage - investment projects groups planned to invest $ 1 billion into the other - were reduced to nil by the redemption precipitated of Bear Stearns by JP Morgan. "They have however never abandoned the idea of expansion", says an analyst.

As Credit Agricole CIB, this alliance demonstrates its ambitions in the brokerage. "It is one of our strategic trades with the structured finance and the"fixed income"," confirmed an observer that points with tremendous opportunities for the Chinese market, where hundreds of companies are waiting for the green light from Beijing to initiate their introduction on the stock exchange. This operation should have significant consequences for the French, since group, so far, the various subsidiaries of brokerage led their lives separate. Moreover, the active brokerage Fortune CLSA Securities, China society, including CLSA currently owns 33, should be dissolved or reinstated to the new structure, China does not allow a foreign group to have two different partners in a same trade.