CGS-CIMB Securities group CEO Carol Fong has confirmed a split between the brokerage’s parent companies, with China Galaxy Securities (CGS) assuming full control by January 2023.
Speaking to The Edge Singapore on Sept 28, Fong says a call and put option has already been put in place. “By January next year, it will be 100% owned by China Galaxy [Securities].” CGS-CIMB declined to reveal the transaction value.
This confirms an August report by The Edge Malaysia, which said Malaysia’s CIMB may exit the venture by divesting its remaining minority stakes to CGS by year-end, leaving CGS as the sole shareholder.
That said, both parties will continue to collaborate in stockbroking, says Fong. “The intention of both CGS and CIMB is to work closely together. So, we are in the midst of finalising a collaboration agreement, to govern our relationship going forward. It's our every intention to work very closely with CIMB, as we have in the past.”
On paper, however, this marks the end of two joint ventures. The regional stockbroking JV was launched in January 2018. In July 2019, the companies set up their Malaysian stockbroking JV, a 50:50 partnership between CIMB’s and CGS’s wholly-owned subsidiaries — CIMB Group Sdn Bhd and China Galaxy International Financial Holdings (CGI) respectively.
Until December 2021, the regional CGS-CIMB Securities was a joint venture between CIMB and CGI.
That month, CIMB reduced its 50% stake in the stockbroking JVs to 25.01% and 25% of CGS-CIMB Securities International (the holding company of the regional JV) and CGS-CIMB Holdings Sdn Bhd (holding company of the Malaysian JV) respectively.
Aside, CGS-CIMB Securities itself has set a target to go public by 2025. “We’re still going through the approval process but our stakeholders have been very supportive,” says Fong. “I'm still hopeful that we can get a listing by the first quarter of 2024.”
At CGS-CIMB, Fong is responsible for the overall management and financial performance of the entire group’s equities business, a regional franchise covering Asia Pacific (ex-Japan) as well as offices in London and New York.
She was previously country investment banking CEO of CIMB Group, where she was responsible for building up the investment banking business, key client and regulator relationships in Singapore.
Fong is also chairman of the SGX Securities Advisory Committee. She is also independent director of the SGX-listed Genting Singapore.