Brokers gain strength through partnership (hktdc.com)


	Reliance Money CEO Sudip Bandyopadhyay (left) and Anthony Espina, Managing Director of Goldride Securities, shake hands on the deal that will bring benefits to both

More international financial services institutions are opening offices in Hong Kong or partnering with Hong Kong firms in a bid to tap into the booming Chinese mainland market and to build a larger client base in the region.

One of the latest to do so is Indian retail broker Reliance Money, which has teamed up with Hong Kong's Goldride Securities to offer financial services to retail investors in the mainland, Hong Kong and India. It's believed to be the first tie-up between a Hong Kong and Indian brokerage firm.

Reliance Money, India's largest brokerage, is a subsidiary of Anil Dhirubhai Ambani's Group. "Hong Kong, which has a sizeable Indian population, is an important financial hub in Asia," said Reliance Money director and CEO Sudip Bandyopadhyay. He pointed out that more than 70 per cent of financial institutions investing in India have their primary office in Hong Kong.

Two-way street

Under the arrangement, Reliance will give its customers in India and Hong Kong access to its stock trading platform, portfolio management services and its investment tools. Goldride, meantime, will provide access to potential retail and institutional clients interested in investing directly in India.

"We decided to team up because we believe that there is room for cooperation between the world's two largest countries, namely China and India," said Anthony Espina, Managing Director of Goldride Securities. Mr Espina noted that the countries have the world's two hottest stock markets. Last year, the mainland stock market grew 300 per cent, while India's market grew 122 per cent.

Partnering Up

In choosing partners, Reliance Money's CEO said that the Goldride partnership was a perfect fit. "Reliance aims to compete with the Goldman Sachs and Merrill Lynches of the world. So when forging alliances we look for partners of reasonably good size, with a clean reputation and one that offers the potential for us to expand to new locations," Mr Bandyopadhyay said.

Mr Espina agreed, noting that while the two firms vary in size and clientele, the two companies "see eye to eye on many issues and we believe that we complement each other." Reliance, he said, is a mass-market firm with many clients and high volume, while Goldride is a specialised firm with high net-worth clients. "We can build on each other's expertise," he said.

Retail orders

The partnership would also allow Goldride to take advantage of Reliance's innovative use of technolgy. Mr Espina cited the more than 10,000 automated teller-like machines at coffee and fast-food chain outlets McDonald's and Starbucks, from which Reliance clients can place orders. He said this would allow Goldride to tap into Reliance's 2.2 million retail clients, and offer dealing services to large fund managers who deal in Indian stocks.

Hong Kong's assets

Meantime, French asset manager, Edmond de Rothschild Asset Management launched its Hong Kong operation in June. "It's not by chance that we are opening in Hong Kong," said Michel Cicurel, chairman of La Compagnie Financiere Edmond de Rothschild Banque, the parent company of Edmond de Rothschild Asset Management. "Hong Kong will remain the permanent gate for the growing successs of China in the financial world as it has always been," Mr Cicurel told the South China Morning Post.

Rothschild Asset Management, which is among the two dozen French controlled financial institutions licensed by the Hong Kong Securities and Futures Commission, will use its Hong Kong office as a research base for its existing funds and will look to distribute its funds in the region.

According to figures from the Hong Kong Investment Funds Association, the size of Hong Kong's combined fund management business has grown to about US$800 billion, more than 60 per cent of which was sourced from overseas investors, with fund sales in Hong Kong reaching a record high of US$46 billion last year.

One of Europe's largest institutional money managers, F&C Asset Management, also opened an office in Hong Kong in June to expand its presence in Asia. Its office is headed by former managing director of Bank of America Securities Asia Alvin Chua. "The Asia region is the engine of global growth and the long term prospects continue to be outstanding," Mr Chua told the Financial Times. "With strong inflows from sovereign wealth funds, central banks, corporates and high net worth individuals, the opportunities for asset managers are considerable."