Credit Suisse to Buy Out China Partner for $160 Million (Caixin)
Credit Suisse Group AG’s Chinese partner agreed to sell its remaining stake in a local joint venture for 1.14 billion yuan ($160 million), the Swiss financial giant said, paving the way for it to take full control of the onshore securities operation. Founder Securities plans to dispose of its entire 49% stake in Credit Suisse Securities (China), according to a Shanghai stock exchange statement Thursday. The companies need to notify China’s securities regulator and the Swiss Financial Market Supervisory Authority on the planned transaction. The deal would make Credit Suisse the latest global bank to control 100% of its onshore securities venture in China after winning approval for majority control more than two years ago. The bank is continuing to invest in China even as headwinds mount amid slowing growth and rising political tension. The bank is also reeling from an exodus of bankers in the U.S. and Asia and a series of scandals. “Credit Suisse sees China as more than a growth market with immense potential, but also a place that offers opportunities for collaboration and mutual benefits,” Carsten Stoehr, Credit Suisse CEO for Greater China, said in an emailed statement. The agreement would allow Founder Securities to further allocate resources rationally and improve the efficiency of capital use, it said. JPMorgan Chase & Co. and Goldman Sachs Group Inc. were the first international banks to take 100% ownership of China ventures last year. Morgan Stanley has taken control of its securities venture and is moving closer to getting full control of its fund management venture. Citigroup Inc. is in the process of apply for futures and securities licenses.
UBS Wins Mandates for Two Chinese Listings in Zurich (Caixin)
UBS Group AG has been selected to arrange the Swiss share sales of two Chinese companies, people familiar with the matter said, as a flurry of firms are capitalizing on an expanded link between stock exchanges in China and Europe. Shanghai Jinjiang International Hotels Co. is working with UBS for its global depositary receipts issuance in Zurich, which could raise at least $500 million, said the people, who asked not to be identified discussing non-public information. UBS is also advising Shenzhen-listed Jiangsu Eastern Shenghong Co. on its GDR sale in Switzerland, the people said, adding that CLSA Ltd. is on the deal as well. Shenghong, a textile products manufacturer, plans to sell GDRs in either Zurich or London to meet its business development needs, according to an exchange filing in August. Shanghai Jinjiang also announced its intention to issue GDRs in Switzerland in the same month. Both GDR sales could be launched before the end of this year, the people said. Deliberations are ongoing and more banks could be added, the people said. A representative for UBS declined to comment, while a representative for CLSA didn’t immediately respond to requests for comment. Shanghai Jinjiang and Shenghong didn’t respond to calls and written requests for comment.
Chinese companies are turning to Switzerland in the hopes of raising funds from overseas investors as geopolitical tension, policy tightening and a global slump in initial public offerings all make conventional listings abroad increasingly difficult. While Beijing and Washington last month reached a preliminary deal to allow American officials to review audit documents of Chinese businesses trading in the US, in hopes of preventing delistings mandated by Congress, companies are still seeking alternative trading venues elsewhere in case of additional fallout. China’s securities regulator said in February that the Shanghai-London Stock Connect, which allows companies that are listed on one exchange to offer depositary receipts on the other, would be extended to include firms listed in Switzerland, Germany and Shenzhen.
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