JPMorgan takes 71% in China securities business

Reuters| Hongkong

The Daily Tribune – www.newsofbahrain.com

JPMorgan JPM.N will own 71% of its Chinese securities joint venture after completing the transaction to buy a 20% stake from one of its local partners, according to an exchange filing on Monday.

The deal, which was first flagged in September, will see the Wall Street bank edge 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 highest ownership stake in a mainland Chinese securities joint venture.

JPMorgan’s purchase was finalized just ahead of the Nov. JPMorgan was the only candidate that could raise its ownership with priority rights in the securities joint venture, the filing showed, as the remaining four shareholders had given up their rights to purchase the 20% stake.

A filing to the exchange on Monday showed JPMorgan paid 177 million yuan ($26.5 million) for the stake and the deal was completed on Oct. 23.

A JPMorgan spokesman declined to comment on the transaction.

The securities joint venture houses investment banking, research, equities and fixed income businesses.

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

The US bank planned to hire at least 12 equity research analysts in China this year, Reuters reported in May, in its first major mainland hiring push.

Major competitors like Morgan Stanley MS.N, Goldman Sachs GX.N and UBS UBSG.S hold 51% of their securities operations and most banks plan to move to full ownership.