- ready to enter China's securities market
Citigroup has signed an agreement with Central China Securities to establish a mainland investment banking joint venture, ahead of an expected opening of the sector to more overseas participation.The venture is expected to apply for regulatory approval in the coming weeks. Citigroup declined to comment and officials at Central China Securities were not available to comment.
The agreement comes as Beijing is poised to relax a two-year ban on foreign investment in the country’s booming domestic securities industry, with A-share listings in Shanghai and Shenzhen raising more than $60bn last year.
Analysts warn that it could take several months before any joint venture receives approval from the Chinese Securities Regulatory Commission.
Citigroup’s move follows those of Credit Suisse and Morgan Stanley, which last month signed separate agreements with Chinese partners to establish mainland investment banking joint ventures. Credit Suisse signed a deal with Founder Group, a Chinese conglomerate that owns a securities arm. Morgan Stanley has signed a preliminary agreement with China Fortune, one of the country’s oldest brokers.
Citigroup already advises mainland companies on overseas IPOs and mergers and acquisitions. The joint venture, if approved, would become the latest plank in the bank’s mainland platform. It has a stake in Shanghai Pudong Development Bank , de facto control of Guangdong Development Bank and its own retail branch network.
Central China Securities, a mid-sized brokerage, has its headquarters in Zhengzhou, in the central province of Henan, although its main investment banking operations are in Shanghai. The company’s website says it has 500,000 brokerage clients.
(Financial Times)
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