Computershare, the Australia-based share registration and securities trading technology foirm, has completed the merger of its Hong Kong share registration business with its rival, owned by Hong Kong Exchanges and Clearing Limited (HKEx), the holding company of the Hong Kong stock and derivatives exchanges and their associated clearing houses. Central Registration Hong Kong Limited and Hong Kong Registrars Limited will now be one company.
The merger follows the purchase by Computershare of the 50 percent of Central Registration it did not own from HSBC. It also follows Computershare’s joint venture with Deutsche Brse, announced in December. The German joint venture, Deutsche Brse Computershare GmbH, took over Deutsche Brse’s “IAB” share registration bureau, which serves about six million accounts in Germany, or over 50% of the market.
The newly merged Hong Kong business, to be called Computershare Hong Kong Investor Services Limited (CHIS), will hold a major position in the market for share registration services in Hong Kong. Its clients will include 22 out of the 33 constituent companies in the Hang Seng Index and all 27 Mainland H-share companies in the Hang Seng China Enterprise Index. “This is a great deal for Computershare that creates a relationship with the major stock exchange in Asia and the gateway to China” says Ed Stockdale, managing director of Computershare UK. “We have dominant positions across virtually all the world’s English speaking markets now and with the German and Hong Kong deals we are expanding our global share solution offerings to global clients”
Chris Morris, Computershare President and CEO, said he was excited about building Computershare’s business in Hong Kong and its relationship with HKEx. “HKEx’s achievements since its demutualisation and listing are impressive. We believe that it is the ideal partner in this exciting market. Like our other businesses around the world, CHIS will use our best of breed SCRIP share registration system and other registry technology tools, and have access to our global pool of shareholder record-keeping and related expertise. When these assets are combined with HKEx’s market knowledge and resources, it is clear that Hong Kong issuers and investors can only benefit from the value brought to CHIS by its shareholders,” Mr Morris said.
“Following the merger, CHIS will enjoy technology advantages and economies of scale. These will lead to better services for its customers as well as HKEx and Computershare,” says Kwong Ki-chi, HKEx Chief Executive. “The merger will not only enable HKEx to streamline its operations and achieve cost savings in its core businesses but also allow HKEx to retain a significant investment in a stronger and better registration business through its share holding in CHIS. The combined strengths of HKEx and Computershare will also help CHIS to consolidate its industry leadership and prepare for the scripless stock market of the future,” Mr Kwong said.
After the merger and an associated sale of shares in the merged entity by Computershare to HKEx, CHIS will be 76 per cent owned by Computershare and 24 per cent by HKEx. The merger and sale and the integration of operations are scheduled for completion within the next few weeks. For the three years following the merger, HKEx will have an option to acquire a further six per cent of CHIS from Computershare, which would raise its holding in the merged company to 30 per cent.
Computershare will nominate three members and HKEx will nominate two members to the board of CHIS. HKEx’s conversion agency business, which handles inter alia the conversion of Tracker Funds units, will be transferred to a new subsidiary within HKEx that is called HK Conversion Agency Services.