Chinese state-owned brokerage to ramp up investment banking business in Southeast Asia

China Galaxy Securities plans to expand investment banking team in Southeast Asia, targeting Chinese enterprises and mid-market deals.

A unit of state-owned brokerage China Galaxy Securities (CGS) plans to expand its investment banking team in Southeast Asia to 50 people next year from 30 now, a senior executive said, betting on a rise in dealmaking in the region amid a sluggish market at home.

CGS International Securities is also in the process of securing a license to help manage initial public offerings (IPOs) in Malaysia, said Jason Saw, its group head of investment banking.

Singapore-headquartered CGS International has over the last 1-1/2 years obtained investment banking business licenses in Indonesia, Malaysia, Singapore and Thailand, Saw told Reuters in an interview.

"The new people that we are onboarding are actually more to build our ASEAN-China relation to cater to Chinese enterprises to go into Southeast Asia," he added.

Saw said that by leveraging on its parents CGS and China Investment Corp, CGS International is targeting deals revolving around China-Southeast Asia relations, dual listings, and mid-market deals valued at 200 million Singapore dollars ($149 million) to 1 billion Singapore dollar ($744 million) in Southeast Asia.

CGS International, whose parent CGS is a subsidiary of sovereign wealth fund China Investment Corp, is seeing growing interest from Chinese strategic investors and funds that want to invest into Southeast Asia to expand and diversify, Saw said.

Weaker capital markets and dealmaking activities in mainland China and Hong Kong due to a slowing Chinese economy and rising geopolitical tensions have prompted some Chinese financial services groups to expand into Southeast Asia.