KUCHING: CIMB Investment Bank Bhd (CIMB) and Kepler Cheuvreux have signed a cooperation agreement and a Memorandum of Understanding (MoU) to cross-distribute equity research in both their respective regional markets in Asia and Europe.
They will also collaborate in creating a single global program trading platform.
Commenting on the signing of the cooperation agreement and MoU, Tengku Datuk Zafrul Tengku Abdul Aziz, group chief executive, CIMB Group said, “In meeting the rapidly increasing demand for high-quality European equity research and execution in Asia, and vice-versa, CIMB is very excited about this tie-up with Kepler Cheuvreux.
“It is a smart and efficient operating structure to reach clients in each others’ regions without the heavy expenses and efforts of setting up local distribution.
“During our discussions, we have been struck by the similarities between our two organisations – both companies have an extensive multi-local set-up within their regions and both firms enjoy dominant positions in their markets and provide an edge for clients with highly-specialised execution capability backed by highly robust research.”
Laurent Quirin, chief executive officer of Kepler Cheuvreux added, “Our detailed modeling indicates that this potential partnership should provide an important revenue opportunity with limited incremental costs on both sides.
“Kepler Cheuvreux already benefits from a leading position in European secondary and primary equities with UK and European clients. We now plan to open up these deep-rooted client relationships to equity products from strong partners based in other regions. I know that CIMB shares a similar philosophy on inter-regional partnerships for their equities business.”
CIMB, one of Asia’s largest investment banks, and Kepler Cheuvreux, a leading independent brokerage firm ranked within the top ten for European equities will work together and leverage each others’ strengths in regional research and execution.
This will include Kepler Cheuvreux staff taking up positions in CIMB’s office in Hong Kong to market European equities to Asian clients. In the UK, access to Asian equities will be provided through CIMB sales personnel as well as sales traders already located in London, while the creation of a new desk in Paris will connect continental European clients with the Asian market.
The cooperation agreement concerns equities only. It is envisaged that the partnership could also be extended to other areas such as equity capital markets, mergers and acquisitions (M&A), retail as well as private banking.
Subject to the appropriate board approvals and compliance and regulatory due diligence, the cooperation agreement is expected to be operational from the fourth quarter of 2015.
Both companies have an extensive research footprint with 750 stocks under research coverage for CIMB (over 1,000 stocks with partnerships) and 675 stocks for Kepler Cheuvreux.