Chinese financial firms press on with debt issuance to fund overseas expansion
Guangzhou-based GF Securities announces plan to raise US$780 million after mainland Chinese finance firms raise over US$10 billion in 2025
Chinese financial institutions raised over US$10 billion last year to fund their overseas expansion and boost the yuan’s internationalisation in line with Beijing’s go-global push, with the trend continuing this year.
GF Securities is raising HK$6.12 billion (US$780 million) from the placement of over HK$3.97 billion worth of new shares and HK$2.15 billion from zero-coupon convertible bonds.
The Guangzhou-headquartered brokerage planned to use the proceeds to inject capital into its offshore subsidiaries to support its international expansion, according to a filing to the Hong Kong stock exchange on Wednesday.
Last year, a number of companies, including China Pacific Insurance, China Citic Bank, Industrial and Commercial Bank of China (ICBC) and China Everbright Bank, issued bonds, citing internationalisation as one of the key reasons, raising between US$300 million and US$2 billion in Hong Kong and other overseas markets.
“While different players in the financial industry may have different reasons for raising funds, overseas expansion has become increasingly necessary rather than a choice due to squeezed domestic profit margins,” said Gary Ng Cheuk-yan, a senior economist at Natixis Corporate and Investment Bank.