There is another futures company increasing its capital! Yesterday, CITIC Securities issued a meeting resolution announcement. According to the announcement, the "Proposal on Capital Increase in CITIC Futures Co., Ltd." was passed, agreeing to increase its capital of RMB 1.995 billion, and to increase its registered capital from RMB 1.605 billion to RMB 3.6 billion. Regarding the purpose of capital increase, CITIC Securities stated that capital increase is mainly used to enhance CITIC Futures' capital strength, expand its business scale, and further improve its market competitiveness.
It is understood that as of now, there are 4 futures companies in China with registered capital of more than 2 billion yuan, namely Wugang Jingyi Futures, Dongsheng Futures, Guotai Junan Futures and Guosen Futures. Among them, Wugang Jingyi Futures has registered capital of 2.715 billion yuan, ranking first. After the completion of this capital increase in CITIC Futures, its registered capital will reach 3.6 billion yuan, making it the futures company with the largest registered capital in China.
As early as the beginning of this month, CITIC Futures officially became a wholly-owned subsidiary of CITIC Securities. On July 8, CITIC Securities issued an announcement on completing the full acquisition of CITIC Futures' equity. CITIC Securities exercised its priority refusal right to acquire 6.53% of CITIC Futures' equity for no more than RMB 471 million. It has completed the equity change and related reporting work, and the company's shareholding ratio of CITIC Futures has been changed to 100%.
In fact, the signs of a "capital increase wave" of securities companies have appeared last year, and many securities companies have increased their investment in futures subsidiaries. According to incomplete statistics from reporters from Futures Daily, five securities futures companies including Baocheng Futures, Guosen Futures, and Xingzheng Futures were all "blood transfusions" in 2018. Among them, Guosen Securities plans to increase its registered capital by 1.4 billion yuan to Guosen Futures, and Oriental Securities completes an increase in capital of 500 million yuan to Dongsen Futures.
As of now, three securities futures companies have seen capital increase this year. In addition to CITIC CITIC Futures, Guotai Junan issued an announcement at the end of May this year, agreeing to increase capital of RMB 800 million to its wholly-owned subsidiary Guotai Junan Futures; Dongsheng Futures has received capital increase for two consecutive years. Oriental Securities issued an announcement at the end of March this year, completing an increase in capital of 300 million to Dongsheng Futures, and Dongsheng Futures’ registered capital was changed to 2.3 billion yuan.
Regarding the reasons for capital increase, most securities companies said that it is mainly based on the actual needs of futures subsidiaries' business development. By enhancing capital strength, the development of futures business will be promoted, thereby promoting the implementation of the company's strategic planning, further optimizing the company's business layout and revenue structure, and improving comprehensive service capabilities and overall competitiveness.
In addition to shareholder capital increase, futures companies' A-share IPOs have also broken the ice this year. On July 4 this year, at the 71st working meeting of the 18th Issuance and Listing Committee of the China Securities Regulatory Commission in 2019, Nanhua Futures Co., Ltd. (hereinafter referred to as Nanhua Futures) successfully passed the IPO (first offering) review. Nanhua Futures has applied for listing on the main board of the Shanghai Stock Exchange, and the number of planned shares issued shall not exceed 70 million. After deducting the issuance expenses, all funds raised will be used to supplement the company's capital. The specific uses include but are not limited to the establishment of subsidiaries, the establishment of business outlets, the replenishment of the capital of the company and its subsidiaries, the development of innovative businesses, strengthening the construction of information systems, mergers and acquisitions, etc.
Immediately afterwards, on July 11, the China Securities Regulatory Commission issued an announcement on the review results of the 77th meeting of the 18th Issuance and Audit Committee in 2019, and Ruida Futures Co., Ltd. (first offering) was approved. Ruida Futures applied for listing on the Shenzhen Stock Exchange SME Board and plans to issue 45 million new shares publicly. After deducting issuance fees, all funds raised will be used to supplement Ruida Futures' capital, expand related innovative businesses, improve the company's business structure, further improve the revenue structure, diversify risks, and improve the company's market competitiveness.
Regarding the capital needs of futures companies, Hu Yuyue, director of the Securities and Futures Research Institute of Beijing University of Technology and Commerce, said in an interview with a reporter from Futures Daily that in the past, futures companies mainly focused on traditional businesses such as brokerage business, and the necessity of listing was not strong. However, with the deepening development of asset management and risk management businesses, domestic futures companies have shown a business development trend of one main, two wings, or even one main, and many wings. Leading futures companies need to make breakthroughs in innovative businesses and find new profit growth points.
In fact, while the futures company's own capital increases, it also increases its investment in its risk management subsidiaries and overseas subsidiaries.Since the beginning of this year, Yongan Futures has completed an increase in capital of its wholly-owned subsidiary Xin Yongan International Financial Holdings, with registered capital increased to HK$559.5 million, while Chuangyuan Futures has completed an increase in capital of 117 million yuan for risk management subsidiary Suzhou Chuangyuan Heying Capital.
Some market insiders said that in the context of the accelerated pace of opening up the capital market to the outside world, my country's futures industry will enter a full opening pattern in 2020. Futures companies need to quickly accumulate funds and deepen development and improve their own business capabilities.
This article is from Futures Daily
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