Securities Firms Restructuring Of The Securities Industry Development

On China抯 financial market of 2000, the limelight focuses on large-scale capital increase of securities companies and M&As. Reviewing over the history of securities industry we find two M&A tides, in 1996 and 1999 separately. The first tide separated securities companies from banks and the second one divides securities companies and trust firms. Thus here arise many questions: Why there抮e so many capital increase and M&As in securities industry? What抯 the macroeconomic background? What抯 the micro-economic motivation for these M&As? What抯 the transition institution? The author writes down the dissertation. To study the M&As in securities industry, we should first analyze the M&As?impact on the securities industry on two levels. One level is how M&A promotes the securities market in a macro view. Another level is how M&A promotes the competitiveness in securities companies in a micro view. Based on the assessment, the author probes into the problems and proposes solutions to the M&As in securities industry. The dissertation mainly discusses the M&As?impact on securities industry, and utilizes theoretical analysis and quantitative method. It also surveys the economic background, motivation, modes and effects of securities companies, M&A, and then concludes the obstacles and future of the companies. The following is the fundamental clue and logical structure of the dissertation. 1 .Questions Through a cross comparison between the histories of Chinese securities industry and that foreign industry of abroad, the author believes the concentration of the industry is a universal phenomenon. Hereby, the author asks: what抯 the inner rationale for such concentration? What抯 the market profile? How to access the impact of M&A? These thoughts set the direction for M&As in securities companies. The logical basis for the M&A behavior of securities companies is their market characteristics. That抯 the main content of Chapter One. 2. Analysis Chapter two is the core of the dissertation, which consists of three parts. (1) As mentioned, the logical basis is the market characteristics of securities industry. To analyze the function of security industry in market, we can consider it in two parts. First, to assess it by focus on its service context; secondly, consider the macro economical location. 1) The services of security industry consists of three areas: first, traditional service, including underwriting, self-brokerage, and agency; second, derivative services, including financial management, and derivative; third, innovation service. These services reveal the intermediary function in security industry, with its core function is to select company by information services. 2) The market determines the function of security industry in macro economic. In the beginning, the market is a cradle for state-owned enterprises. Hence the market expands fast by promotion of government. The expansion of volume in market requires the expansion of security companies. Thus, the issue becomes a necessity for them to conduct M&A. As we further the state ownership institution, the macro background forwards more demanding requirements on security markets and stress more on the innovation and resources allocation functions. The M&A would eliminate the abnormal competition among them. Such a macro background analysis forms a consolidated base for the following assessments and reveals the importance of political impa...