UBS AG claimed that its landmark purchase of Class-A shares is on schedule, denying a media report that its custodian bank has trouble in opening renminbi accounts for the qualified foreign investor scheme.
"Lots of paperwork remains to be completed before we can get into the A share market, but the report which said that we have met a technical problem in opening the account in the custodian bank is not true," said Matthew Mcgrath, spokesman for UBS.
Mcgrath declined to specify what kind of paperwork still needed to be done, claiming that his company was on track to move into the US$160 billion A share market.
On Friday, a report carried by International Finance News said that UBS encountered technical trouble in setting up the special renminbi account, which is used to deposit its investment capital. The Switzerland-based bank has hired Citibank to provide the custodian service.
UBS planned to buy the Class-A shares by the end of June, said the report.
Among the four Qualified Foreign Institutional Investors that have been approved by the China Securities Regulatory Commission, UBS was expected to place the first order to bid Class-A shares after it received the go-ahead from the State Administration of Foreign Exchange for US$300 million in investment quota. It then appointed Shenyin & Wanguo Securities Co Ltd as the local stockbroker.
But the securities company, which has applied to the Shanghai and Shenzhen stock exchanges for two additional seats reserved for QFIIs, is puzzled why UBS' first order has been delayed.
"As was expected, UBS should have placed the first order last week and it has already been delayed now," said an official from Shenyin & Wanguo Securities, who requested anonymity.
UBS' investment quota is a combination of its own capital and the capital from its clients.
By the end of May, the Chinese securities regulator had approved UBS and Nomura Holdings Inc as the first batch of QFIIs allowed to participate in China's Class-A share market.
Nomura received from SAFE an investment quota of US$50 million, but has yet to choose a local broker.
Last month, the securities regulatory body named two more firms as QFIIs - Morgan Stanley Co International Ltd and Citigroup Global Transaction Services.
(Shanghai Daily July 7, 2003)
