Credit Suisse Group, Switzerland's second-largest bank, proposed
to take a 33.3 percent stake in a Chinese securities joint venture,
after teaming up with Founder Securities Co Ltd, the lender said
today in a statement.
Credit Suisse and Founder Securities intend to apply for the
establishment of a joint venture in the near future. In addition,
Credit Suisse and Founder Group, the parent firm of Founder
Securities, intend to explore establishing a strategic alliance in
areas such as domestic institutional brokerages and wealth
management. Both require regulatory approval, according to the
statement.
''Credit Suisse believes that in Founder it has an extremely
strong partner, with invaluable local expertise and experience in
the Chinese financial services industry,'' said Paul Calello, chief
executive officer of Credit Suisse Investment Bank.
Kai Nargolwala, CEO of Credit Suisse Asia Pacific, said this was
a great way to start 2008.
Subject to receiving all regulatory approvals, the joint
venture, under Credit Suisse and Founder Securities, will engage in
the sponsoring and underwriting of A-shares, foreign investment
shares, government and corporate bonds.
Last year, China's brokerage firms were among the biggest
beneficiaries of China's booming stock market. They reported a
combined 138.2 billion yuan (US$18.9 billion) profit from trading
stocks, mutual funds and options in 2007, said Shanghai Securities
News.
The lucrative sector has begun to attract foreign investors.
The United States financial service firm Morgan Stanley signed
an agreement with China Fortune Securities Co to set up a joint
venture last month. US-based investment bank Bear Stearns Co Inc
and CITIC Securities Co also formed a strategic partnership.
Also, South Korea's Daishin Securities Co teamed up with China
Merchants Securities Co, while the Bank of New York Mellon Corp
partnered with Western Securities Co to tap the nation's fast
growing capital market.
China has approved four joint-venture brokerages and 28 joint
venture mutual fund management firms in the mainland.
Under new rules issued by the China Securities Regulatory
Commission on December 28, the maximum stake foreign investors can
hold in a local securities firm will remain 33.3 percent.
(Shanghai Daily January 10, 2008)
