Hong Kong touted as Samsungs global target

By Kim Da-ye

The chief executive of Samsung Securities, one of the country’s largest brokerages, revealed ambitions to expand the company’s business overseas and mentioned Hong Kong as an ideal starting point.

Park Chun-hyeon, president and chief executive officer of the Samsung Group affiliate, said the firm is aiming to develop its Hong Kong operation, which it hopes will provide a foundation to eventually become a leading regional player.

The eventual goal, Park said, would be developing into an investment banking house that could hold its own against global institutions.

“Domestic securities firms have to become larger and to go global [in order to sustain their growth],” Park said at a news conference held in Seoul Tuesday.

Park’s comments come just days after Financial Services Commission Chairman Kim Seok-dong urged local brokerages to try harder to expand abroad and be more aggressive in exploiting merger and acquisition (M&A) opportunities.

Hong Kong is an ideal market to achieve an international breakthrough for Samsung Securities, Park said.

“The U.S. and Britain are too far away [in terms of our capacity to reach and do well in those markets]. We know our current capacity. We want to foster our competitiveness in Hong Kong, Asia’s most advanced market. And Asia is emerging as a financial area that is globally relevant,” he said.

The company’s goal is to become an Asian top-five in the industry by 2015 and make the world’s top-10 by 2020, Park said.

Samsung Securities invested 30 billion won in Hong Kong last year, and is expected to break even this year. By 2013, the firm could generate 200 billion won in sales in Hong Kong, according to company officials.

The Hong Kong office currently employs 42 analysts, 24 traders, 10 investment banker and 20 to take care of human resources and management.

That’s a significant improvement from August 2009 when nine analysts covered seven sectors with 41 companies. As of December 2010, 42 analysts covered 13 sectors with up to 200 firms. The number of corporate clients also shot up from 29 to 243 during the same period. Samsung Securities has been operating in Hong Kong for about two and a half years.

Samsung Securities is also entering Singapore and Taiwan this year.

In Taiwan, the company hopes to open a research center by May and a trading unit by September. It has hired five research staff members who are now working in Hong Kong until the launch of the Taiwan office. The firm plans to recruit five more analysts, making a 10-member research team.

As for Singapore, the company plans to focus on sales rather than trading and research to eventually open an office in the second half of 2011.

Hwang Sung-june, the Global Head of Equities and CEO of the firm’s Asia unit, said that Samsung Securities would consider launching a research center covering Southeast Asia in Singapore after studying the market.

The former Credit Suisse executive said that now is a good time to enter Hong Kong, the world’s largest initial public offering (IPO) market. He said that during the financial crisis, many global institutions have shed talent and shrunk.

In order to support such ambition, Park said the firm needs strong retail sales at home which could potentially grow further through wealth management and retirement pension management services.

The brokerage chief vowed to diversify its products ― Samsung Securities is famous for having brought the “wrap accounts” to the Korean market ― and investing in infrastructure such as IT facilities.