UBS, the Swiss bank, pursues complete ownership of a securities firm in China
Beijing State-owned Assets Management announced that it will auction off its 33 percent stake in UBS Securities.
UBS, a Swiss bank, could potentially become the first foreign financial institution to fully own a securities company in China. This possibility arises after one of its partners withdrew from their joint venture, UBS Securities.
Beijing State-owned Assets Management (BSAM) confirmed its decision to sell its 33 percent stake in UBS Securities.
With UBS holding 67 percent of the joint venture, they have expressed interest in buying BSAM’s shares at an asking price of 1.54 billion yuan ($212.5 million).
UBS has already initiated the process of increasing its ownership in UBS Securities to 100 percent, as reported by a spokesperson for the bank to Reuters on Nov. 26.
Established in China in 2006, UBS Securities became the first foreign majority-owned securities firm in China in 2018, when UBS raised its shares from 24.99 percent to 51 percent.
Should UBS become the first foreign sole owner of a securities company in China, it would demonstrate Beijing’s continued support for opening up the financial market and foreign trade access, according to U.S.-based economist Davy J. Wong.
“It’s very important because geopolitical and trade frictions have seriously affected the confidence of overseas investors, so China wants to attract them by creating the impression of an open and regulated market,” Wong stated.
Additionally, BSAM’s decision to exit UBS Securities could be influenced by various political and economic factors, such as investment returns, risk management, asset value realization, and geopolitical tensions between China and the United States, as noted by Sun Kuo-hsiang, a professor at Nanhua University.
Foreign investment in China is declining while facing risks due to the economic slowdown and increased regulatory pressures. Observers warn of potential financial crises and uncertainties in China’s banking and stock market sectors.
Luo Ya and Dorothy Li contributed to this report.
