Guotai Junan and Haitong Securities to Combine Forces

  • China-owned brokerages Guotai Junan Securities and Haitong Securities plan to merge
  • The merged entity will have $228.28 billion in assets
  • Guotai Junan will issue A shares and H shares for the share swap
  • Merger aims to strengthen China’s domestic financial market
  • Consolidation in the financial services sector is supported by Chinese authorities

Two China-owned financial institutions, Guotai Junan Securities and Haitong Securities, have agreed to merge through a share swap, creating an entity with $228.28 billion in assets. This move is part of Beijing’s efforts to strengthen its domestic financial market and follows Chinese authorities’ push for consolidation in the financial services sector. The merged company will become China’s largest brokerage. Guotai Junan will issue A shares and H shares to Haitong stockholders in exchange for their held shares, with the combined market capitalization reaching around 237.93 billion Hong Kong dollars in Hong Kong and 216.69 billion yuan in Shanghai after the merger. The deal is subject to approval from regulatory authorities.

Factuality Level: 8
Factuality Justification: The article provides accurate information about the merger between Guotai Junan and Haitong Securities, their assets, and the reasons behind the consolidation in China’s financial services sector. It also mentions the decline in net profit for both companies. However, it lacks some details on the specific share swap plan and the timeline of the merger.
Noise Level: 3
Noise Justification: The article provides relevant information about the merger of two Chinese financial institutions and its implications for the domestic market, but lacks in-depth analysis or exploration of the consequences on those who bear the risks. It also does not offer much actionable insights or new knowledge beyond the basic facts of the merger.
Public Companies: Guotai Junan Securities (600837), Haitong Securities (Not provided)
Key People:

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Financial Relevance: Yes
Financial Markets Impacted: China’s financial sector and Hong Kong and Shanghai stock exchanges
Financial Rating Justification: The article discusses the merger of two Chinese financial institutions, Guotai Junan Securities and Haitong Securities, which will create an entity with $228.28 billion in assets and become China’s largest brokerage. The merger is significant for the Chinese financial sector and impacts the Hong Kong and Shanghai stock exchanges where the companies are listed.
Presence Of Extreme Event: No
Nature Of Extreme Event: Other
Impact Rating Of The Extreme Event: Minor
Extreme Rating Justification: There is no extreme event mentioned in the article. The merger between Guotai Junan and Haitong Securities is a significant financial event, but it does not meet the criteria for an extreme event as defined by the given categories.
Deal Size: 13800000000
Move Size: No market move size mentioned.
Sector: Financial Services
Direction: Up
Magnitude: Large
Affected Instruments: Stocks

Reported publicly: www.wsj.com