China CITIC Securities on Tuesday extended the suspension of its
stock trading as talks on collaboration with US investment bank
Bear Stearns continued.
The Shanghai-listed CITIC Securities did not reveal details of
the collaboration, but reports said the two sides had reached a
preliminary agreement involving a cross investment of one billion
US dollars each.
The government-controlled CITIC Securities, China's largest
listed securities company, will gain a six-percent stake in Bear
Stearns, a leading Wall Street investment and brokerage firm.
Bear Stearns is reportedly seeking to acquire a similar stake in
CITIC Securities, yet the move must be approved by China's industry
watchdog.
The two sides planned to share management expertise and
technologies to provide new products and services to get a bigger
share of China's booming financial market.
They are also considering setting up a joint venture to offer a
large range of financial services across Asia.
Burnt by this summer's subprime mortgage crisis, Bear Stearns
was forced to merge two of its mortgage subsidiaries and cut
hundreds of jobs due to heavy losses from mortgages. Market rumors
have Morgan Stanley, Bank of America and HSBC intending to purchase
stakes in Bear Stearns.
Earlier media reports said that CITIC Bank, another listed arm
of the state-owned conglomerate CITIC Group, was bidding for a
stake in Bear Stearns. CITIC Bank denied the rumor on Oct. 18.
"Our company is seeking to tide over the domestic market
turbulence by going international," said Wang Dongming, Chairman of
the CITIC Securities.
(Xinhua News Agency October 23, 2007)
