KUALA LUMPUR: CIMB Investment Bank Bhd (CIMB IB) has inked a deal with Kepler Cheuvreux to cross-distribute equity research in both their respective regional markets in Asia and Europe.

In a statement, CIMB IB said the two companies had signed a cooperation agreement and a memorandum of understanding to effect the cooperation. They will also collaborate in creating a single global programme trading platform.

CIMB IB and Kepler Cheuvreux, a leading independent brokerage firm ranked within the top 10 for European equities, will be working together and leveraging  strengths of both entities in regional research and execution, said CIMB IB.

This will include Kepler Cheuvreux staff taking up positions in CIMB IB’s office in Hong Kong to market European equities to Asian clients.

In the United Kingdom, access to Asian equities will be provided through CIMB IB sales personnel and sales traders already located in London, while the creation of a new desk in Paris will connect continental European clients with the Asian markets.

CIMB Group Holdings Bhd group chief executive (CEO) Tengku Datuk Zafrul Tengku Abdul Aziz said CIMB is very excited about this tie-up with Kepler Cheuvreux.

“It is a smart and efficient operating structure to reach clients in each other’s regions, without the heavy expenses and efforts of setting up local distributions,” he said.

Kepler Cheuvreux CEO Laurent Quirin said detailed modelling indicated that the potential partnership should provide an important revenue opportunity, with limited incremental costs on both sides.

The cooperation agreement only revolves around equities.

CIMB IB said the partnership could also be extended to other areas, such as equity 

capital markets, mergers and acquisitions, retail and private banking.

Subject to the appropriate board approvals, and due diligence and regulatory compliance, the cooperation agreement is expected to be operational from the fourth quarter of this year.

Both companies have an extensive research footprint, with 750 stocks under research coverage for CIMB (over 1,000 stocks with partnerships) and 675 stocks for Kepler Cheuvreux.

This article first appeared in The Edge Financial Daily, on June 29, 2015.