Nov 27, 2012 02:52 PM

Gao Hua Securities Acquires Shenzhen Futures Broker

(Beijing) – Goldman Sachs' strategic partner in China, Beijing Gao Hua Securities, has embarked on futures trading by acquiring Shenzhen-based broker QK Futures Corp.

The acquisition was announced by Gao Hua on November 26. A source from the firm said the move allows Gao Hua to officially enter the futures market with its own products. More types of futures would be developed, but there was no timetable yet, he said.
Gao Hua did not reveal details of the transaction.

QK is a full service clearing member of Shanghai Futures Exchange, Dalian Commodity Exchange and Zhengzhou Commodity Exchange.

This means Gao Hua can trade commodities futures and stock index futures through QK's membership with the exchanges, the Gao Hua source said.
Gao Hua teamed up with Goldman Sachs in 2004 to launch Goldman Sachs Gao Hua. Goldman Sachs holds 33 percent of the joint venture and the rest belongs to Gao Hua. The joint venture specializes in securities brokerage, and Goldman Sachs focuses on investment banking.
Goldman Sachs reportedly had been looking for cooperation with a Chinese futures brokerage and was among a number of foreign investors that showed interest in QK Futures. It wants to diversify services offered in China through its partnership with Gao Hua.

Acquiring QK is a step towards the goal and a demonstration of Gao Hua's continued devotion to the Chinese market, Gao Hua CEO Zhang Xing said.

QK would operate independently as a subsidiary of Gao Hua and retain its brand, the Gao Hua source said.

QK lost 3.7 million yuan in 2011, with the volume of broker transactions down nearly 67 percent on 2010. Its annual report said the decline was partly because the firm had chosen clients more rigorously than counterparts to suit higher business standards and also because there were few rich clients.

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