By Yantoultra Ngui and Selena Li
SINGAPORE/HONG KONG (Reuters) – China International Capital Corp (CICC) plans to expand its presence in Southeast Asia by opening offices in Indonesia and Malaysia, among others, its investment banking chief said, as a slump in deals harms his prospects in his own country.
Founded in 1995, the Beijing-based investment bank currently has a presence in seven international financial centers outside mainland China, including Hong Kong, New York, London and Singapore.
State-owned CICC opened a representative office in Vietnam in June, expanding its presence in Southeast Asia, home to several fast-growing economies.
CICC, China’s oldest investment bank and one of its largest, has been hit hard by shrinking dealmaking activity in the mainland and Hong Kong due to a slowing Chinese economy and rising geopolitical tensions.
“CICC wants to expand its presence in other (Southeast Asian) regional markets next,” Wang Shuguang, member of CICC’s management committee and head of its investment banking department, told Reuters.
“CICC sees business opportunities in these countries and markets and wants to be present by opening offices to get closer to local clients and help clients grow,” added Wang, who leads more than 2,000 investment bankers at CICC.
Wang did not reveal how much CICC plans to invest or how many people it will hire for its push into Southeast Asia. He also made no mention of targets for revenues or deals from the region.
In its key markets, China and Hong Kong, CICC has cut wages for bankers and considered reducing workforces. The investment bank has also suffered a decline in profits and share price.
Other investment banks in China have also been hit, sparking a rush among Chinese and Wall Street banks to tap business opportunities in other markets in the Asia-Pacific region.
MAGNET FOR INVESTMENTS
Southeast Asia has been a magnet for global investment in recent years, driven by the region’s fast-growing economies, young and digitally savvy populations and improving infrastructure.
Despite the gloom over China-related dealmaking activity, the country’s outward investment in Southeast Asian countries rose 27% in 2023 from a year earlier, according to a report from Griffith University. Indonesia was the largest recipient of this with approximately US$7.3 billion.
CICC, which includes top Chinese technology companies Tencent and Alibaba.com (NYSE:) strategic shareholders sees significant opportunities in private fundraising for local unicorns and startups in Southeast Asia, Wang said in June at the company’s China-Southeast Asia economic and financial forum.
Other opportunities include the increase in cross-border investments by Chinese companies, especially in sectors such as consumer, technology, media, telecom, fintech, logistics and electric vehicles, in Southeast Asia, he added.
Reuters reported in May that CICC could cut its investment banking workforce by at least 10% this year, impacting more than 200 bankers at home and in Hong Kong, where most of the offshore workforce is based.
CICC shares are down about a fifth so far this year, after falling 23% last year.
