Indian brokerage house in $50-mn pact with South African firm

September 15th, 2008 - 8:50 pm ICT by IANS  

New Delhi, Sep 15 (IANS) India’s fourth largest securities brokerage house, SMC Group, has inked a $50-million (Rs.2-billion) joint venture deal with the investment arm of South African financial services giant, Sanlam Ltd, it announced here Monday.SMC’s agreement with Sanlam Investments will see the setting up of two new businesses in India - a wealth management company and an asset management company - to take advantage of the immense growth opportunities in India.

“Sanlam will ultimately own a five percent equity in the two flagship SMC companies, SMC Global Securities Ltd and SAM Global Securities Ltd,” SMC’s chairman and managing director S.C. Aggarwal told reporters.

“I am as elated as all my colleagues in SMC Group and Sanlam Group are about this landmark deal,” Aggarwal said.

“SMC is currently the fourth largest initial public offer (IPO) distributor in the retail category in India and we are also the fourth largest in terms of trading terminals. Our customer base exceeds 400,000, and this is growing at 10,000 new accounts per month,” he said.

“Following this joint venture, the Indian financial services space will see the further rise and transformation of SMC from our position as one of the largest securities brokerage house into a well diversified company, with enormous global reach and intellectual know-how in line with international best practice,” he said.

Sanlam Investments is the investment arm of South Africa’s leading financial services group, Sanlam, which has been a leader in South Africa for more than 90 years.

Sanlam Investments comprises 14 specialised investment management businesses, each of which is a leader in its area.

Key businesses include Sanlam Investment Management, which is the group’s asset manager and Sanlam Private Investments, the private client business.

“This is the first step in our India investment strategy and a springboard for further expansion into the continent,” an SMC statement quoted Sanlam Investment’s chief executive Johan van der Merwe.

“For us it is a bold step into one of the biggest markets in the world and a transaction that is in line with our international expansion strategy of furthering our business scope into promising markets outside of South Africa,” Merwe said.

“SMC is a young and vibrant business with a large client base catering to all classes of investors. Although SMC is well known for its extensive pan-India experience, its personal touch and easy accessibility to investors across the country impressed us,” he said.

“We believe the Indian market has tremendous opportunities and our joint venture would be able to take full advantage of the same,” he added.

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