City of london corporation china a tremendous opportunity for the city and global asset managers1/29/2024 ![]() But even that number must be seen in context. On the positive side of the ledger, Citi’s JV with Shanghai-based Orient Securities generated profit of $179.1 million in 2018. In October 2019 UBS Securities was the first foreign bank to sponsor an IPO on Shanghai’s new Nasdaq-style Star Market, helping Haohai Biotech to raise Rmb1.5 billion ($212 million). Yet the brokerage pocketed a profit of just $10.1 million in 2018, down 76.5% year on year, on revenues of $824 million. It renamed the firm UBS Securities and crucially won management control, despite only owning 25%. ![]() UBS is another trailblazer, courtesy of its 2006 bailout of troubled Beijing Securities. Yet its Huaxin joint venture posted a net loss of $99.8 million in 2018 on revenues of $175 million. It went on to build two onshore brokerages, first with CICC, then with Huaxin Securities, underwriting a slew of first-time China stock offerings both on and offshore. In 1993 Morgan Stanley was the first New York firm to open an office in China. Beijing spent the last two decades either keeping foreign firms at bay or grudgingly handing out marginally expanded operating licences.Įven pioneers struggled. No one is confused about the scale of the task ahead. Once foreign banks have the right licences, they can trade securities and commodities, and manage wealth and assets, onshore for local and international clients, all in their own names. In doing so, Asia’s largest economy is finally opening the doors to its $21 trillion capital markets and forcing national champions such as Citic Securities and CICC to compete openly with the likes of JPMorgan and Goldman Sachs.įor now, the frustrations of the past are forgotten. In January 2020, as part of a trade deal with the US, financial regulators said foreign banks could apply to own their onshore securities businesses outright from April 1, eight months earlier than expected. Investment banking is getting real in China.
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