While rival institutions review their China business strategies, Credit Suisse is taking a contrarian view and is moving ahead in the belief that the market will become a key revenue source.
Credit Suisse Founder Securities (CSFS) the Beijing based joint venture established by Founder Securities and Credit Suisse in 2008 has announced the launch of their onshore brokerage and the offering of a full suite of services.
Joint venture operations in China by foreign banks have not always worked out as intended with many ending in litigation or parties walking away from each other. Credit Suisse owns 33.3 percent of the joint venture, with the remainder held by Founder Securities.
Onshore Brokerage Services
Credit Suisse is celebrating the official launch of its China onshore brokerage business at its 7th Annual China Investment Conference, which begins today in Shenzhen, China.
With today's announcement Credit Suisse is among the first global banks to operate an onshore brokerage business in China.
Last year, CSFS received the relevant approvals from the China Securities Regulatory Commission for it to expand the scope of its business to conduct securities brokerage activities in the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone (Qianhai).
This is in addition to its existing capital markets services, which include sponsoring and underwriting of A-shares, foreign investment shares, and government and corporate bonds as well as financial advisory.
The CEO Believes in China
Credit Suisse Chief Executive Tidjane Thiam, who took to youtube to officially announce the commencement of their new services, spoke about his personal belief in the long term success of the Chinese economy.
The commencement of Credit Suisse’s onshore brokerage business via CSFS comes ahead of the imminent launch of the Shenzhen-Hong Kong Stock Connect, the new cross-border share trading link between Hong Kong and China.
An Asian Influence
Credit Suisse forecasts that with the new mutual market access scheme, an additional pool of over $50 billion will flow southbound from domestic insurers on the Mainland to the Hong Kong market over the next two to three years.
«With the much anticipated MSCI inclusion of A-shares in its Emerging Market indices, international interest in the A- share market is bound to increase,» said Nicole Yuen, Vice Chairman and Head of Equities, Greater China at Credit Suisse.
Credit Suisse is due to release their third quarter results tomorrow and the Asian influence is expected to play a significant part.
