JPMorgan takes 71% in China securities business

In this news, we discuss the JPMorgan takes 71% in China securities business.

HONG KONG (Reuters) – JPMorgan JPM.N to own 71% of its Chinese securities joint venture after finalizing transaction to buy 20% stake from one of its local partners, swap brief says published Monday.

The deal, which was first reported in September, will see Wall Street bank move closer to full ownership of the securities business in China, as geopolitical relations between the United States and China remain fragile.

It will also position JPMorgan as the foreign bank with the largest stake in a mainland Chinese securities joint venture.

The JPMorgan purchase was finalized just before the November 3 election, in which the future of China’s relations with the United States was at the center of the campaign.

The stake was listed for sale by state-owned Shanghai Waigaoqiao FTZ, a deposit on the Shanghai United Assets and Equity Exchange showed in September.

JPMorgan was the only candidate who could increase its stake with priority rights in the securities joint venture, the record showed, with the remaining four shareholders waiving their rights to purchase the 20% stake.

A stock exchange filing on Monday showed that JPMorgan paid 177 million yuan ($ 26.5 million) for the stake and the deal was closed on October 23.

A spokesperson for JPMorgan declined to comment on the transaction.

The securities joint venture combines investment banking, research, equity and fixed income activities.

The US bank planned to hire at least 12 equity research analysts in China this year, Reuters reported in May, during its first major recruitment drive on the mainland.

Big competitors like Morgan Stanley MS.N, Goldman Sachs GX.N and UBS UBSG.S own 51% of their corporate actions and most banks plan to move to full ownership.

($ 1 = 6.6866 yuan Chinese renminbi)

Reporting by Scott Murdoch in Hong Kong and Samuel Shen in Shanghai; Edited by Stephen Coates

Original © Thomson Reuters

Originally posted 2020-11-01 20:56:10.

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