Computershare, the listed Australian share registrar with the global reach, has bought Hong Kong's largest share registrry by acquiring the 50 per cent of Central Registration Hong Kong it did not previously own for $A40 million in cash. The announcement coincided with the release of Computershare's first half financial results which, despite showing a 76 per cent jump in net profit to $A18.3 million, nonetheless failed to satisfy market analysts.
The Hong Kong acquisition from a subsidiary of HSBC Holdings, is regarded as a strategic move consistent with Computershare's plans to build its global network of share registrars, but is also significant in that it gives the company ownership of the "leading player in the region's largest securities market outside Japan", explained Julian, Leiper, executive chairman of Central Registration.
He added that Computershare is investing in the company in anticipation of a scripless market in Hong Kong, as well as to align Central Registration with its other share registration centres in key financial markets. Central Registration has been appointed share registrar for more than 200 listed companies, including 21 out of the 33 Hang Seng Index stocks.
Chris Morris, group managing director of Computershare, reinforced the need for the Australian company to expand its global reach. "Increasingly, share registration is a sophisticated, computer-driven and Internet-enabled service as financial markets become global," he explained. "To compete in this business we need significant equity in operations strategically positioned in all of the world's key financial centres. Hong Kong is an important link in this network and Central Registration is the market leader."
For the half year to December 31 Computershare lifted revenue 94 per cent from $A174.5 million to $A338.9 million. The rise in net profit was achieved despite a pre-tax write-down of $A13.25 million on Computershare's investment in online share broker E*Trade, and a loss from the company's US treasury division. Morris said a restructuring of the US operation was under way and it will be operating on Computershare's SCRIP/COSMOS registry system within 12 months.