bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

paywallTypes

createdDate

publishedDate

urlAlias

moreOnThisArticles

sponsorType

commentCount

authorLocations

authors

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

articleSpeeches

socialHeadline

headline

images

flag

firstTopic

glossary

flattenTypeIds

image

relatedLinks

relatedNewsletters

__typename

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

In the latest example of consolidation in the competitive online broking industry, BOC International (BOCI), the investment banking arm of the Bank of China Group, has announced it is taking over Hutchison CSFBdirect.

In a joint statement released over the weekend, Credit Suisse First Boston (CSFB) and Hutchison E-Commerce said they had struck a deal with BOCI to acquire Hutchison CSFBdirect, their joint-venture online retail brokerage.

No financial terms of the sale were disclosed.

The deal confirms long-held industry speculation that the Hong Kong-based company was hunting for a suitor, after CSFBdirect, CSFB's United States online brokerage arm, was sold to Bank of Montreal last November.

At the same time, CSFBdirect's British operations were sold to TD Waterhouse.

The companies said the transaction was expected to close in early May after the completion of certain conditions, including BOCI's obtaining requisite regulatory and other related approvals.

The statement said the acquisition would allow BOCI to 'leverage on [the company's] . . . technology platform and established business operations, as well as its online customer base'.

At the same time, Hutchison CSFBdirect would 'benefit from BOCI's business infrastructure, extensive distribution network and broad customer base', it said.

Dominic Lai Kai-ming, Hutchison executive director, said: 'We believe an established financial institution that can offer a comprehensive range of financial services and products has major competitive advantage in providing online retail brokerage services in this market.

'Both shareholders have decided that a direct transfer of ownership to BOCI represents the best way forward for the company as it can benefit from the Bank of China Group's vast retail market resources and established connections in Hong Kong.'

The deal follows a string of closures among pure online brokerages in Hong Kong, which critics have argued proved that only companies with a physical component to their e-businesses would survive.

United States e-brokerage giant Charles Schwab closed its SAR stock-trading operation late last year, while 2Cube Securities was forced to close and sell key assets - including an 8,000-strong customer list - to E*Trade Hong Kong in December.

By contrast, brokers such as CASH Financial Services and SHK Financial Group said they had shown steady growth in online business by leveraging traditional operations, such as a strong physical branch network.

In June, TD Waterhouse formed an alliance with DBS Bank, which has more than 100 branches throughout Hong Kong.

Kenny Tang Sing-hing, Tung Tai Securities associate director, said the behaviour of retail investors in Hong Kong was a better fit with the traditional brokerage model.

'The number of retail investors in Hong Kong is still relatively small, so it's easy for brokers to have a personal relationship with their clients. Also, many brokerages in Hong Kong are very conveniently located, with branches in shopping malls and other places,' Mr Tang said.

'Given that, most clients still want to have a real broker they can call or meet for information and advice.'

CSFBdirect , which was established by US investment bank Donaldson, Lufkin and Jenrette (DLJ), was originally known as DLJdirect, until the bank's acquisition by CSFB in late 2000.

BOCI said Hutchison CSFBdirect's operations would continue as normal following conclusion of the merger.



Online broker to join BOCI stable