UPDATE 1-China's Citic Securities dips after $1.7bln HK debut

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By Elzio Barreto

HONG KONG Oct 6 (Reuters) - Citic Securities Co Ltd, China's largest listed brokerage, fell as much as 4.5 percent before recovering on its Hong Kong stock market debut on Thursday, after raising a less-than-expected $1.7 billion in its first listing outside the mainland.

Citic Securities is among the few companies to successfully launch a stock offering in Hong Kong during the past months, with a long list of deals pulled or postponed due to the volatile markets.

In early morning trade, Citic Securities shares were trading at HK$12.96 compared with the offer price of HK$13.30 each and recovering from the day's low of HK$12.70. The company sold shares at the bottom of a revised price range of HK$13.30-$15.20 a share last week.

While the shares held close to the offer price, they traded far below the broader market. The benchmark Hong Kong stock exchange index was up 4.4 percent in early trade.

Citic Securities , already listed on Shanghai's stock exchange, is part of China's state-backed conglomerate Citic Group which was formed in 1979 as China's first financial group.

The Hong Kong listing comes at a time when global stock markets have plunged on concerns about European debt crisis, among other factors. The benchmark Hang Seng index tumbled to a 2-1/2 year low on Tuesday, falling eight of the past nine sessions, during which the index lost about 15 percent.

Citic Securities is the biggest Hong Kong listing since the $2.5 billion initial public offering by luxury goods maker Prada in June.

The offering is the first of nearly $35 billion in share sales in Hong Kong and China still planned in the coming months by financial companies, including Haitong Securities, New China Life and China Guangfa Bank.

Investors have been on high alert and remain wary of equity markets because of lingering concerns over Europe's debt troubles and fears of a slowdown in the U.S. and Chinese economies.

Just last month, some $4.5 billion worth of deals were pulled in Hong Kong including Sany Heavy Industry and rival XCMG Construction Machinery Co Ltd , underscoring tepid investor appetite for IPOs

Apart from Citic Securities, only five other companies including shoemaker Hongguo International Holding and tea company Tenfu Holdings sold stock in Hong Kong the past two weeks since offerings resumed after a two-month hiatus.

The five offerings raised a total of $510 million. The slowdown in share sales the past months in Hong Kong, Singapore and other main markets in the region contributed to a 49 percent slump in Asia Pacific equity capital markets in the third quarter from a year earlier.

Securities companies in China are forecast to post annual profit growth of nearly 20 percent between 2011 and 2013, buoyed by an increase in capital markets activity and new businesses such as margin financing and private equity investments, BOC International estimated.

Citic Securities was the sole global coordinator of the offer, with a group of banks including BOC International, CCB International, Bank of America Merrill Lynch and Credit Agricole's CLSA unit helping to underwrite the deal. (Reporting by Elzio Barreto; Editing by Denny Thomas and Michael Flaherty)

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Dexia accepts rescue offer after marathon meeting

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A boy walks past the logo of Belgian-French financial services group Dexia in Brussels in this October 9, 2011 file photo. Belgium will buy the Belgian banking business of Dexia for 4 billion euros ($5.4 billion) and provide the bulk of guarantees to cover leftover assets of the parent group, the Belgian government said on October 10, 2011.

Credit: Reuters/Francois Lenoir/Files

By Philip Blenkinsop and Robert-Jan Bartunek

BRUSSELS | Mon Oct 10, 2011 2:11am EDT

BRUSSELS (Reuters) - Franco-Belgian bank Dexia agreed early on Monday to the nationalization of its Belgian banking division and secured state guarantees in a rescue that could pressure other euro zone governments to strengthen their banking sectors.

Belgium will pay 4 billion euros ($5.4 billion) to buy Dexia Bank Belgium, the largely retail Belgian division, which has 6,000 staff and deposits totaling 80 billion euros from 4 million customers.

Dexia also secured state guarantees of up to 90 billion euros to secure borrowing over the next 10 years. Belgium would provide 60.5 percent of these guarantees, France 36.5 percent and Luxembourg 3 percent.

Dexia's announcement came after a board meeting that lasted some 14 hours from mid-afternoon on Sunday after France, Belgium and Luxembourg had agreed a rescue plan.

The extraordinary meetings at the end of the weekend had echoes of the dismantlement of financial group Fortis in October 2008 by the Netherlands, Belgium and BNP Paribas. Then, shareholders protested at the initial terms offered, and only agreed on improved terms six months later.

The governments rushed to support Dexia after it became the first bank to fall victim to the two-year-old euro zone debt crisis, as a credit crunch denied it access to wholesale funds and sent its shares down 42 percent last week.

"We found an agreement on the fair division of the costs related to the management of the 'rest bank'," Belgian Prime Minister Yves Leterme told a news conference in the early hours of Monday.

The likely burden of bailing out Dexia led ratings agency Moody's to warn Belgium late on Friday that its Aa1 government bond ratings may fall.

The country had a debt-to-GDP ratio of 96.2 percent last year, lower only than Greece and Italy among euro zone members and on a par with bailout recipient Ireland.

Finance Minister Didier Reynders said that the deal should not push Belgium's debt-to-GDP ratio above 100 percent.

Dexia, which used short-term funding to finance long-term lending, found credit drying up as the euro zone debt crisis worsened. The problem was exacerbated by the bank's heavy exposure to Greece.

Dexia has global credit risk exposure of $700 billion - more than twice Greece's GDP - and its rescue has stoked investors' anxieties about the strength of European banks in general.

The governments' rescue package came as the leaders of France and Germany agreed that European banks needed to be recapitalized, but papered over differences on how that would happen.

Paris wants to tap the euro zone's 440 billion euro ($594 billion) European Financial Stability Facility (EFSF) to recapitalize French banks, while Berlin is insisting the fund should be used as a last resort.

There were fresh reports over the weekend that big French banks BNP Paribas and Societe Generale might agree to capital injections as part of a Europe-wide plan to boost lenders' financial strength. However, both banks deny such plans.

Dexia's board had also instructed the company's chief executive to seek backing from French state bank Caisse des Depots. A consortium of CDC and La Banque Postale, the French post office's banking arm, would ensure the financing of public entities in France.

It was not clear what would be the fate of healthy businesses, such as Denizbank in Turkey, its asset management operation and its funds custody joint venture with Royal Bank of Canada.

Its Luxembourg division is set to be sold.

Otherwise, Dexia will be left with a portfolio of bonds in run-off, which totaled 95.3 billion euros at the end of June and including 7.7 billion euros of junk class and some 7.4 billion euros of mortgage-backed securities.

Dexia's shares have been suspended since Thursday afternoon. Belgium's financial markets watchdog said trading would resume on Monday after the bank's news conference and analyst call.

Chairman Jean-Luc Dehaene and Chief Executive Pierre Mariani were scheduled to host a news conference at 0900 Central European Time (0700 GMT). ($1 = 0.741 Euros)

(Reporting By Philip Blenkinsop. Editing by Sebastian Moffett and Ramya Venugopal)

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UPDATE 1-China's Citic Securities dips after $1.7bln HK debut

AppId is over the quota
AppId is over the quota

(Adds details, background)

By Elzio Barreto

HONG KONG Oct 6 (Reuters) - Citic Securities Co Ltd, China's largest listed brokerage, fell as much as 4.5 percent before recovering on its Hong Kong stock market debut on Thursday, after raising a less-than-expected $1.7 billion in its first listing outside the mainland.

Citic Securities is among the few companies to successfully launch a stock offering in Hong Kong during the past months, with a long list of deals pulled or postponed due to the volatile markets.

In early morning trade, Citic Securities shares were trading at HK$12.96 compared with the offer price of HK$13.30 each and recovering from the day's low of HK$12.70. The company sold shares at the bottom of a revised price range of HK$13.30-$15.20 a share last week.

While the shares held close to the offer price, they traded far below the broader market. The benchmark Hong Kong stock exchange index was up 4.4 percent in early trade.

Citic Securities , already listed on Shanghai's stock exchange, is part of China's state-backed conglomerate Citic Group which was formed in 1979 as China's first financial group.

The Hong Kong listing comes at a time when global stock markets have plunged on concerns about European debt crisis, among other factors. The benchmark Hang Seng index tumbled to a 2-1/2 year low on Tuesday, falling eight of the past nine sessions, during which the index lost about 15 percent.

Citic Securities is the biggest Hong Kong listing since the $2.5 billion initial public offering by luxury goods maker Prada in June.

The offering is the first of nearly $35 billion in share sales in Hong Kong and China still planned in the coming months by financial companies, including Haitong Securities, New China Life and China Guangfa Bank.

Investors have been on high alert and remain wary of equity markets because of lingering concerns over Europe's debt troubles and fears of a slowdown in the U.S. and Chinese economies.

Just last month, some $4.5 billion worth of deals were pulled in Hong Kong including Sany Heavy Industry and rival XCMG Construction Machinery Co Ltd , underscoring tepid investor appetite for IPOs

Apart from Citic Securities, only five other companies including shoemaker Hongguo International Holding and tea company Tenfu Holdings sold stock in Hong Kong the past two weeks since offerings resumed after a two-month hiatus.

The five offerings raised a total of $510 million. The slowdown in share sales the past months in Hong Kong, Singapore and other main markets in the region contributed to a 49 percent slump in Asia Pacific equity capital markets in the third quarter from a year earlier.

Securities companies in China are forecast to post annual profit growth of nearly 20 percent between 2011 and 2013, buoyed by an increase in capital markets activity and new businesses such as margin financing and private equity investments, BOC International estimated.

Citic Securities was the sole global coordinator of the offer, with a group of banks including BOC International, CCB International, Bank of America Merrill Lynch and Credit Agricole's CLSA unit helping to underwrite the deal. (Reporting by Elzio Barreto; Editing by Denny Thomas and Michael Flaherty)

View the original article here