Morgan Stanley has a chance to raise stakes in China ventures

Reuters · 02/05/2021 13:27
Morgan Stanley has a chance to raise stakes in China ventures

- Shanghai Chinafortune Co 600621.SS said on Friday its brokerage subsidiary plans to sell stakes in Morgan Stanley's MS.N Chinese securities and mutual fund ventures, potentially enabling the U.S. bank to move toward full control.

China Fortune Securities Co plans to auction a 39% stake in Morgan Stanley Huaxin Securities, and its entire 36% stake in Morgan Stanley Huaxin Fund Management Co through the Shanghai United Assets and Equity Exchange, Chinafortune said in an exchange filing.

Morgan Stanley declined to comment.

Global banks and asset managers, including Morgan Stanley, JPMorgan JPM.N and Goldman Sachs GS.N, have been increasing stakes in joint ventures in China, as Beijing fully opened the country's financial industry last year. nL1N2IO08A

Majority, or full ownership could make is easier for foreign banks to expand their operations in the multi-trillion-dollar Chinese financial sector.

Chinese state-controlled companies often transfer stakes through auctions. In 2019, Morgan Stanley bought a 2% stake in its Chinese securities JV from China Fortune Securities also through an auction.

Following the stake sale, China Fortune Securities will still own 10% of Morgan Stanley Huaxin Securities, which is currently 51% owned by Morgan Stanley.

Morgan Stanley currently owns a 49% stake in its Chinese fund venture, which means the U.S. bank will gain majority control if it succeeds in buying the stake to be auctioned from China Fortune Securities.

Shanghai Chinafortune said the auction deals will need to go through certain procedures.


(Reporting by Samuel Shen and Alun John. Editing by Jane Merriman)

((samuel.shen@thomsonreuters.com; +86 21 20830018; Reuters Messaging: samuel.shen.thomsonreuters.com@reuters.net))