By Pratima Desai LONDON, Oct 15 (Reuters) - The British arm
By Pratima Desai
LONDON, Oct 15 (Reuters) – The British arm of China Retailers Securities 6099.HK600999.SS (CMS) will shut its commodities brokerage after a evaluate of the enterprise that aimed to align it with the group’s international technique, a letter seen by Reuters mentioned.
The letter didn’t element the technique.
CMS’s United Kingdom, Hong Kong and China workplaces didn’t reply to emailed requests for remark. Phone calls to the London workplace have been unanswered.
Based mostly in Shenzhen and listed in Hong Kong and Shanghai, CMS in 2019 was the fourth-largest securities dealer by belongings in China with revenues of 25.66 billion yuan ($3.eight billion).
Metallic broking sources say CMS retreating from London may very well be linked to political tensions between Britain and China over Hong Kong, however that the choice was additionally tied to the London operation’s difficulties in producing income.
Commodity buying and selling volumes this 12 months have come underneath stress from COVID-19 lockdowns, which have hit demand for oil and industrial metals corresponding to aluminium and zinc.
One supply with direct data of the matter mentioned the choice to shut CMS’s London commodities unit was made by the Hong Kong workplace, however declined to provide additional particulars or say whether or not the London workplace would shut utterly.
“Sadly because of a change in enterprise course, we’ve taken the choice to shut our commodity brokerage enterprise which has been working within the UK since 2014,” the letter despatched to a buyer this week mentioned.
The letter signed by CEO Wei Zhang additionally mentioned China Retailers Securities (UK) Restricted (“CMSUK”) is trying to shut the client’s accounts by Nov. 30.
“We are going to take away all margin/credit score amenities in your accounts from October 28th 2020,” the letter mentioned. “As a way to facilitate the closure of your accounts we would require you to shut out, or switch out, positions you at present maintain.”
CMSUK is a Class 2 member of the London Metallic Trade, permitting it to commerce LME contracts on the trade’s digital system and on the phone and as a member of LME clear it might probably clear trades for itself and for patrons.
Additionally it is a member of the Intercontinental Trade ICE (ICE), in accordance with CMSUK’s web site.
“(CMSUK) will ultimately have to surrender each the LME and ICE,” a supply acquainted with the matter mentioned.
Chinese language banks and brokers have for some years made a beeline for a bigger slice of the billions of {dollars} of commodities enterprise that goes by London yearly.
($1 = 6.7261 Chinese language yuan renminbi)
(Reporting by Pratima Desai; further reporting by Tom Daly and Samuel Shen in Shanghai; enhancing by Veronica Brown and Emelia Sithole-Matarise)
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