Caixin
Jan 18, 2017 06:29 PM
BUSINESS & TECH

Sinopec Gets Approval for Stake in Securities Firm

(Beijing) — China Petroleum & Chemical Corp., or Sinopec, has received approval from securities regulators to acquire a stake in a securities firm, as the top state-owned oil refiner continues its expansion into the financial services sector.

JZ Securities Co., Ltd., which is registered in the western province of Qinghai, received approval from local securities regulatory authorities on Monday to issue 370 million shares for 407 million yuan ($59 million), Wu Qiang, deputy manager of Tong Chuang Jiu Ding Investment Management Group Co. Ltd., told Caixin on Tuesday. The investment firm currently holds an 85.76% stake in JZ securities.

Sinopec will become the second-largest shareholder with a 10.98% stake in the securities brokerage firm after the transaction, though the oil and gas giant originally intended to invest more than 5 billion yuan, Wu said. He added that Sinopec will make a further investment of about 5 billion yuan.

JZ Securities plans to use the funds it raises to grow its private equity investment, overseas business and other securities services, according to a prospectus obtained by Caixin. The document also discusses its attempt at the time to list on China’s over-the-counter equity trading market by the end of 2016 — an effort that would prove unsuccessful.

As a state-owned enterprise, Sinopec of course would want to expand into the securities sector to meet the growing demand for financial services, sources at several securities firms said. And Sinopec appears to be lagging behind China National Petroleum Corp. (CNPC), another Chinese state-run oil and gas producer and supplier, which has extended its reach to a wide range of financial business — including banking, insurance, securities, and fund management — through its capital investment subsidiary.

Sinopec was given permission in August to run an insurance brokerage business through a wholly owned subsidiary. Two years earlier, it set up a financial leasing company with China Taiping Insurance Group to grant leases for its oil and gas facilities and other equipment to smaller firms. In 2013, Sinopec started a payment company to support its sales business, including prepaid gas-filling cards.

Contact reporter Dong Tongjian (tongjiandong@caixin.com)

You've accessed an article available only to subscribers
VIEW OPTIONS
Share this article
Open WeChat and scan the QR code