Li Jiange says China International Capital Corporation will not rush into international expansion as some financial institutions in China are investing heavily overseas. Provided to China Daily

The sluggish capital market is one reason why China International Capital Corporation (CICC), the country's leading investment bank, does not want to rush into overseas expansion, CICC's chairman Li Jiange told China Daily.

"Since there are so many uncertainties in the market, our business performance for the rest of the year is hard to forecast," Li said.

Plagued by the weak capital market, CICC's net profit slid nearly 70 percent to 130 million yuan ($20.35 million) in the first half of the year, while its revenue declined 26.66 percent year-on-year to 1.41 billion yuan, according to the company's interim statement released in July. Other major investment banks also suffered losses due to the market slump.

Joint-venture securities firms began to flourish after China joined the World Trade Organization in 2001 and agreed to gradually open its securities industry. CICC, which was established in 1995, was the country's first joint-venture investment bank.

Li said that China is the "beacon" of the world economy in terms of its economic performance, and the domestic market should remain the central focus of the company's business.

However, he also said that Central Asia and Russia were among the potential areas for expansion, especially as Russia is undergoing a wave of "privatization".

With Russian companies seeking to be listed on stock markets, there are greater opportunities for investment there, and there might also be attractive opportunities for mergers and acquisitions (M&As) in Russia for CICC, Li said.

CICC, which has branches in Hong Kong, Singapore, New York and London. has been striving to serve Chinese companies seeking overseas listing and M&A opportunities.

According to the company's "go global" strategy, CICC has been working to diversify its business lines to hedge the risks from the capital market. Currently, investment banking accounts for about 50 percent of CICC's revenue, compared with 80 percent in its early years.

Earlier this month, the company expanded its business into the trust industry by taking a 35 percent stake in Hangzhou-based Zheshang Jinhui Trust Co. In June, CICC became the first Chinese member of the London Stock Exchange. Since then, it has been allowed to trade UK stocks, international deposits, funds and commodities.

In the same month, CICC launched a yuan-denominated private equity fund with the approval of the China Securities Regulatory Commission, the country's securities regulator. The CICC Industrial Integration Fund was set up to raise 5 billion yuan with a focus on M&As and investment.

"The fund has made several investments so far, with some of the target projects being pretty attractive," Li said.

Although CITIC Securities Co Ltd, one of CICC's main rivals, recently began its plan to list in Hong Kong, Li said an initial public offering (IPO) is still a long-term strategy for CICC.

"On the one hand, our new strategic investors still need some time to understand the company. On the other hand, some of our business lines are not strong enough at the moment and their investment value needs time to mature," Li said.

In December, the industry regulator gave approval for Morgan Stanley to transfer its 34.3 percent stake in CICC to Kohlberg Kravis Roberts & Co, TPG Capital, the Government of Singapore Investment Corporation Pte Ltd and Great Eastern Life Assurance Company Limited.

This move, some analysts said, might accelerate CICC's listing process.