Aug. 23 (Bloomberg) -- Citic Securities Co., Asia's biggest brokerage by market value, may raise 25 billion yuan ($3.3 billion) selling shares in Shanghai to finance acquisitions and expansion into private equity and derivatives trading.

The Beijing-based company will offer as many as 350 million new shares at 74.91 yuan on Aug. 27, it said in a statement today. It would be China's third-biggest stock sale this year. The shares jumped 5.9 percent to a record 94.95 yuan in Shanghai.

Citic Securities, after passing Japan's Nomura Holdings Inc. in market value this week, is seizing on investor enthusiasm for stocks that made China the world's best-performing market this year. Chairman Wang Dongming, who boosted first-half profit more than fivefold, plans to triple capital at the futures unit to extend his lead over local rivals.

``The share sale will cement Citic Securities' dominant position in China's brokerage industry on almost every front,'' said Luo Yi, an analyst at China Merchants Securities Co. in Shenzhen. ``It is preparing to become an all-round securities firm that may eventually compete with rivals in the global arena.''

On Aug. 22, Citic Securities announced plans to start a private-equity fund in China and invest more in the futures division to offer products that help investors hedge risk. The company, with 65.5 billion yuan in assets at the end of last year, has since 2004 bought bankrupt Huaxia Securities Co. and Kington Securities Co.

Valuation Premium

Today's share price gain values Citic Securities at $37 billion, higher than Nomura's $35 billion. The stock has more than tripled this year. The firm trails only Goldman Sachs Group Inc., Morgan Stanley and Merrill Lynch & Co. in market value.

Investors pay a premium for Citic. The stock trades at about 35.8 times estimated full-year profit, according to data compiled by Bloomberg. Goldman, the world's most profitable securities firm, has a price-earnings multiple of 8.1.

Citic Securities and other Chinese brokerages have seen profits balloon as Chinese citizens poured more of their $2.2 trillion of household savings into the stock market. Chinese investors have opened 33 million brokerage accounts this year, six times the total for 2006.

Still, local securities firms may face more competition as the government prepares to end a year-old ban on purchases of Chinese brokerages by foreign buyers. Goldman and UBS AG are the only global investment banks who exert management control over underwriting ventures in China.

Stock-Sale Frenzy

Efforts by Chinese brokerages to expand their range of services also reflect lessons learned during a five-year bear market that ended in 2005, and during which many firms reliant on stock trading collapsed. Chinese brokerages lost a combined 15 billion yuan in 2004.

Citic Securities' sale will bring the value of domestic offerings this year to almost 182 billion yuan, more than the 171 billion yuan raised in all of 2006. It would almost match the 25.2 billion yuan Bank of Communications Ltd. raised in April in China's second-largest sale this year.

In addition, Citic Securities is the biggest underwriter of domestic equity sales this year, topping the list for the first time since 2004, according to data compiled by Bloomberg.

Selling stock has become a more attractive financing option, after the central bank raised interest rates four times this year and as valuations soared. The benchmark CSI 300 Index has advanced 152 percent since Dec. 31 and yesterday closed above 5,000 points for the first time.

Citic Securities is controlled by Citic Group, formerly China International Trust & Investment Corp., the country's biggest investment company.

Soochow Securities Co. will manage the deal.

To contact the reporter on this story: Jianguo Jiang in Shanghai at jjiang@bloomberg.net

Last Updated: August 23, 2007 04:50 EDT