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Morgan Stanley (MS) Close to Starting Futures Company in China
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The China Securities Regulatory Commission (“CSRC”) has accepted Morgan Stanley’s (MS - Free Report) application to set up a futures company in the country. A spokesperson for Morgan Stanley said that the bank “looks forward to establishing a futures company in China as we grow our domestic business footprint.”
With this, Morgan Stanley will become the second foreign bank to wholly own a futures business in the world’s second-largest economy.
The first foreign bank to fully own a futures company in China is JPMorgan (JPM - Free Report) . In June 2020, JPM received approval to increase its stake in its futures joint venture (JV) — J.P.Morgan Futures Co. — from 49% to 100%.
Notably, China is the second-largest equity market globally, and is one of the broadest and deepest growth markets outside the United States. Given that China’s financial market is open to foreign firms following the removal of ownership restrictions in 2018, several global banks have capitalized on the lucrative prospect.
In August 2021, JPMorgan received regulatory approval to obtain full ownership of its China securities JV. The CSRC granted the Wall Street banking giant permission to own a 100% stake in J.P. Morgan Securities (China) Co.
In November 2020, JPMorgan raised its stake in the securities venture to 71%, which came after the company completed the transaction to buy a 20% stake from one of the local partners — Shanghai Waigaoqiao FTZ — for 177.7 million yuan ($26 million).
Like JPM, Credit Suisse Group AG also wanted to fully own its securities JV in China. In September 2022, Credit Suisse entered an agreement to buy out its local partner, Founder Securities’ 49% stake in Credit Suisse Founder Securities for 1.14 billion yuan ($163.92 million).
Credit Suisse Founder Securities was formed in 2008 as a JV between Credit Suisse and Founder Securities. The JV provides various capital market services to clients in the domestic China market, which include sponsoring and underwriting shares, foreign investment shares, and government and corporate bonds, along with financial advisory services.
In June 2020, CS raised its shareholding in the JV to 51% from 33.3% following the opening of the China markets.
Notably, Morgan Stanley has a presence in China since 1994. With offices in Beijing, Shanghai, Hangzhou, Shenzhen and Zhuhai, and a regional office in Hong Kong, the company offers a wide array of services to domestic and international clients, including financing, restructuring, M&A advisory, research, fixed income and foreign exchange.
Over the past six months, shares of Morgan Stanley have gained 6.2% against the industry’s decline of 6.4%.
Image: Bigstock
Morgan Stanley (MS) Close to Starting Futures Company in China
The China Securities Regulatory Commission (“CSRC”) has accepted Morgan Stanley’s (MS - Free Report) application to set up a futures company in the country. A spokesperson for Morgan Stanley said that the bank “looks forward to establishing a futures company in China as we grow our domestic business footprint.”
With this, Morgan Stanley will become the second foreign bank to wholly own a futures business in the world’s second-largest economy.
The first foreign bank to fully own a futures company in China is JPMorgan (JPM - Free Report) . In June 2020, JPM received approval to increase its stake in its futures joint venture (JV) — J.P.Morgan Futures Co. — from 49% to 100%.
Notably, China is the second-largest equity market globally, and is one of the broadest and deepest growth markets outside the United States. Given that China’s financial market is open to foreign firms following the removal of ownership restrictions in 2018, several global banks have capitalized on the lucrative prospect.
In August 2021, JPMorgan received regulatory approval to obtain full ownership of its China securities JV. The CSRC granted the Wall Street banking giant permission to own a 100% stake in J.P. Morgan Securities (China) Co.
In November 2020, JPMorgan raised its stake in the securities venture to 71%, which came after the company completed the transaction to buy a 20% stake from one of the local partners — Shanghai Waigaoqiao FTZ — for 177.7 million yuan ($26 million).
Like JPM, Credit Suisse Group AG also wanted to fully own its securities JV in China. In September 2022, Credit Suisse entered an agreement to buy out its local partner, Founder Securities’ 49% stake in Credit Suisse Founder Securities for 1.14 billion yuan ($163.92 million).
Credit Suisse Founder Securities was formed in 2008 as a JV between Credit Suisse and Founder Securities. The JV provides various capital market services to clients in the domestic China market, which include sponsoring and underwriting shares, foreign investment shares, and government and corporate bonds, along with financial advisory services.
In June 2020, CS raised its shareholding in the JV to 51% from 33.3% following the opening of the China markets.
Notably, Morgan Stanley has a presence in China since 1994. With offices in Beijing, Shanghai, Hangzhou, Shenzhen and Zhuhai, and a regional office in Hong Kong, the company offers a wide array of services to domestic and international clients, including financing, restructuring, M&A advisory, research, fixed income and foreign exchange.
Over the past six months, shares of Morgan Stanley have gained 6.2% against the industry’s decline of 6.4%.
Image Source: Zacks Investment Research
Currently, Morgan Stanley carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.