Hong Kong exchange to acquire majority stake in Chinese fintech firm

Zhejiang New Century
A worker removes old logos on the glass door as a new one is dispalyed at an entrance to the Hong Kong Exchanges Hong Kong, China January 21, 2016. REUTERS/Bobby Yip

Hong Kong Exchanges and Clearing Ltd (HKEX), the stock exchange operator in the Asian financial hub, has agreed to buy a majority stake in a Chinese financial technology firm’s unit to bolster the markets’ technological capabilities.

The financial details of HKEX’s acquisition of a 51-percent stake in Ronghui Tongjin Technology Co Ltd, a unit of Shanghai-listed Shenzhen Kingdom Sci-Tech Co Ltd, were not disclosed.

Ronghui Tongjin’s technology services cover areas including financial exchanges and regulation technologies, HKEX said in a statement, adding that the deal would reduce its reliance on third-party vendors and trim implementation risks.

“The proposed acquisition will support HKEX’s strategy to further build its financial markets’ technological capabilities, at a time of rapid change in the global exchange landscape,” said the exchange statement.

The deal is expected to be completed in the second quarter of this year, after which Kingdom Sci-Tech’s holding in Ronghui Tongjin will fall to 29.4 percent from the current 60 percent, HKEX added.

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Reuters