KVB Kunlun appoints adviser on CITIC offers

KVB Kunlun Financial Group Ltd (HKG:8077), the Hong-Kong focused retail Forex broker, today announced the appointment of Octal Capital Limited as an independent financial adviser on its deal with CITIC Securities Company Limited (SHA:600030).

Octal Capital Limited, which has licenses to carry out Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities under the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong), will advise the independent board committee of the broker in connection with CITIC’s offers.

This is the first important piece of news after China’s CITIC Securities Company Limited (SHA:600030) finalized its purchase of a 60% stake in KVB in late February, paying HK$0.65 per share (giving a total of some $101 million). Under the Hong Kong takeover law, CITIC may proceed with an offer to acquire the ‘public’ shares of the broker.

Share price in KVB spiked today, with the current price at HK$ 1.30. This is the first rise for quite some time, as investors have been getting more uncertain over whether CITIC would offer a higher bid for the broker’s stock.

If we have to dig deeper into the factors that drive the movements of KVB’s share prices, we have to admit that today’s spike does not necessarily reflect the financial adviser naming. Yesterday the company announced the date for the reporting of its 2014 results – March 31st. Given the recent solid performance of the broker, markets could be anticipating another set of solid metrics and are rushing to buy KVB shares.


Five-day price chart for KVB Kunlun. Chart source: Google Finance.

The official announcement on the financial adviser appointment can be viewed here.

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