Morgan Stanley set to buy larger stakes in China securities, funds joint ventures
05/29/2021
Morgan Stanley is the latest Wall Street bank to seek further control of Chinese joint ventures. China Fortune Securities plans to sell stakes in Morgan Stanley Huaxin joint ventures.
Morgan Stanley is set to buy stakes in its Chinese securities and mutual fund joint ventures for 958.6 million yuan (US$150 million), giving it greater control of those companies as the country's financial sector further opens up to foreign lenders.
China Fortune Securities Company plans to sell a 39 per cent stake in Morgan Stanley Huaxin Securities, and its entire 36 per cent stake in Morgan Stanley Huaxin Fund Management Company to the American investment bank, the company said in filings with the Shanghai Stock Exchange on Friday.
The sale would give Morgan Stanley a 90 per cent stake in the securities joint venture, with the remaining 10 per cent held by China Fortune. The Wall Street bank would own an 85 per cent stake in the fund company following the sale.
Morgan Stanley has had a presence in China since 1993 and received approval to establish the securities joint venture in December 2010.
Morgan Stanley and other foreign lenders are racing to increase their presence in the mainland after Beijing moved to ease rules on foreign ownership in the financial services sector last year, including securities firms, asset managers and insurers.
In part, banks are targeting rising incomes in the Greater Bay Area, which links Hong Kong and Macau with nine cities in Guangdong province. The region boasted a population of 72 million people and gross domestic product of US$1.7 trillion two years ago.