JPMorgan increases stake in China securities business to 71%

REUTERS/Mike Segar

JPMorgan will own 71% of its Chinese securities joint venture after completing the transaction to buy a 20% stake from one of its local partners, according to an exchange filing on Monday.

The deal, which was first flagged in September, will see the Wall Street bank edge closer to full ownership of the securities business in China as geopolitical relations between the United States and China remain fragile.

It will also position JPMorgan as the foreign bank with the highest ownership stake in a mainland Chinese securities joint venture.

JPMorgan’s purchase was finalised just ahead of the Nov. 3 election in which the future of China’s relationship with the United States has been a centrepiece of the campaign.

The stake was put up for sale by state-owned Shanghai Waigaoqiao FTZ, a filing on the Shanghai United Assets and Equity Exchange in September showed.

JPMorgan was the only candidate that could raise its ownership with priority rights in the securities joint venture, the filing showed, as the remaining four shareholders had given up their rights to purchase the 20% stake.

A filing to the exchange on Monday showed JPMorgan paid 177 million yuan ($26.5 million) for the stake and the deal was completed on Oct. 23.

A JPMorgan spokesman declined to comment on the transaction.

The securities joint venture houses investment banking, research, equities and fixed income businesses.

The U.S. bank planned to hire at least 12 equity research analysts in China this year, Reuters reported in May, in its first major mainland hiring push.

Major competitors like Morgan Stanley, Goldman Sachs and UBS hold 51% of their securities operations and most banks plan to move to full ownership.

Reuters

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.