Morgan Stanley, JPMorgan Move Closer to Control of China Ventures
(Bloomberg) -- Morgan Stanley and JPMorgan Chase & Co. are moving closer to control of their joint ventures in China.
The Chinese partner of Morgan Stanley's securities joint venture said on Tuesday it is selling a 2% stake for at least 376 million yuan ($55 million) and any potential buyer will have until July 29 to submit a bid. On Monday, JPMorgan's local partner said it will cede control in its asset-management venture for 241 million yuan.
The moves come after the world's two largest economies agreed to resume trade negotiations over the weekend, with U.S. President Donald Trump saying he will hold off imposing an additional $300 billion in tariffs. As Beijing remains steadfast in its commitment to level the $44 trillion financial-industry playing field, Wall Street banks are eager to gain a stronger foothold, even at hefty prices.
Read more: Trump Revives China Talks With Tariffs Truce
The minimum asking price in Morgan Stanley's securities venture is nearly 15 times the appraisal value, according to Bloomberg calculations based on numbers in the filing, while for JPMorgan's fund venture, the price represents about a 33% premium. Both U.S. banks, which currently hold a 49% stake in their respective ventures, have indicated they'll raise the interest to the maximum 51% allowed.
The JPMorgan transaction “looks rather rich, whether including or excluding the premium for control,” asset-management research firm Z-Ben Advisors Ltd. said in a note July 1. “Global managers should expect the deal's metrics will be applied to all that follow.”
China is seeking to encourage international investors to become more involved in its financial sector and has removed some limits on foreign ownership of financial institutions as well as taking steps to ensure local bonds can be bought by global funds. In recent months, authorities have approved plans by JPMorgan, UBS Group AG and Nomura Holdings Inc. to take majority stakes in local securities ventures.
To contact Bloomberg News staff for this story: Jun Luo in Shanghai at jluo6@bloomberg.net;Zhang Dingmin in Beijing at dzhang14@bloomberg.net
To contact the editors responsible for this story: Katrina Nicholas at knicholas2@bloomberg.net;Sam Mamudi at smamudi@bloomberg.net
©2019 Bloomberg L.P.
With assistance from Bloomberg
-
Indians Stay With Family, Not In Hotels | The Reason Why
India still lacks enough clean, reliable and affordable hotels for budget-conscious travellers.
-
The Economic Imperative: Analysing The Material Driving Force Behind India-Canada Strategic Reset
This economic complementarity is further reinforced by deep institutional investment ties and talent mobility, which form the bedrock of the bilateral framework.
-
Medicine Pricing: Where Must Profit Stop?
India must confront excessive margins, hidden incentives and regulatory gaps that threaten the integrity of medicine.
-
Why Amazon And Flipkart Are Struggling To Beat Meesho In India's Smaller Cities
With 274 million users and lowest-cost logistics, Meesho is defending its value commerce crown against giants like Amazon and Flipkart.
-
High US Salaries, No Green Card Certainty: The Financial Calculation Facing Indian H-1B Families
The suspension of PERM processing at eight technology employers does not cancel existing H-1B visas. What it does is force a question many Indian families have been avoiding: is the US salary worth tying your career and family plans to one employer?
-
Swiggy vs Eternal: Food Delivery's Two Rivals Are No Longer In The Same Race
Eternal is building a private AI assistant, dark.ai. Swiggy is still working out how to make Instamart pay, with an operating loss of Rs 895 crore in the July-September quarter while Blinkit stayed profitable.
-
Where You Live Shapes How You Get To Work | The Reason Why
Two-wheelers are the most popular way to get to work in India, accounting for nearly 43% of workplace commutes.
-
Unhedged Position: Can India See An Indonesia-Style Time Correction?
The Nifty is trading below levels it first clocked in 2024. Is there, then, as I have suggested in the headline, potential that the current time correction drags on painfully for the next three-five, even ten years?
-
Navigating Friction And Energy Realities: An Analysis Of Marco Rubio's October Visit To India
Occurring at a critical juncture marked by stalled trade negotiations and escalating geopolitical pressures over global energy supplies, the visit offers a profound window into modern US-India relations.
-
India Exports Capital. Why Not Export Trusteeship?
The big question, then, is whether India can build an institution that global borrowers, investors, banks, and lawyers can trust, even without an Indian connection.
