Others News
- UBS wins right to own brokerage
Date: 8-Mar-2007 Sources: (Xinhua Online)
UBS AG has become the first overseas securities firm to win the right to own a Chinese brokerage as soon as the law permits, two people with direct knowledge of the agreement said, according to Bloomberg News.
The bank, which will initially own 20 percent of the UBS Securities Co venture, has a written agreement that its five Chinese partners are willing to sell their stakes, the people said, asking not to be identified before an announcement by the nation's securities regulator.
Gaining a bigger stake would help Zurich-based UBS control its expansion in China, where total market capitalization tripled in value in the past 12 months and more than 20 billion U.S. dollars of share sales are planned this year.
The UBS venture offers a benchmark for multinational rivals such as Citigroup Inc and Merrill Lynch & Co, which are queuing up to start securities firms.
'UBS can't guarantee its partners are always going to be on the same page,' said Liu Feng, an analyst at Guangdong Securities Ltd. 'While it's unlikely China will allow overseas investors to wholly own its domestic brokerages in the medium-term, there will be a gradual opening up, probably to 49 percent within the next five years.'
Hong Kong-based spokesman for the Swiss bank, Chris Cockerill, declined to comment.
Only Goldman Sachs Group Inc and UBS have management control of brokerages in the country. China said in September that it would stop issuing brokerage licenses to international firms, giving local companies time to improve profits.
The ban thwarted plans by banks including Citigroup and Merrill Lynch to boost trading in China.
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