Stars in their eyes

6 May 2013 By John Foley Follow @johnsfoley

Listing the country’s biggest broker in Hong Kong while investors are shunning stocks at home may seem strange. But Galaxy is a bet that China’s markets must at some point get bigger and deeper. If share prices pick up in the meantime, it should benefit more than listed peers.

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China Galaxy Securities on May 6 launched an initial public offering in Hong Kong that could raise as much as $1.3 billion. Galaxy is China’s biggest broker of stocks and bonds by revenue, with over 5.5 million clients and 229 branches at the end of 2012.
Galaxy is offering around 1.5 billion shares at an indicative range of HK$4.99 to HK$6.77, according to IFR, citing sources familiar with the situation. That would be equivalent to between 1.2 and 1.5 times the company’s net asset value.
Galaxy is 89 percent owned by China’s Ministry of Finance and Huijin, the vehicle which also owns stakes in the country’s biggest financial institutions. The company was founded in 2007 to combine the former securities trading arms of China’s four biggest commercial banks.

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