(Yicai Global) Oct. 11 -- UBS may have become China's first fully foreign-owned brokerage following moves by two Chinese companies to sell off stakes in the Swiss investment bank's local unit.
China National Cereals, Oils and Foodstuffs Corporation and Guodian Capital Holdings sold their respective 14 percent and 12 percent stakes in Chinese joint venture UBS Securities as a package to a single buyer for a combined CNY858 million (USD123.6 million), a Beijing Equity Exchange statement says. Although the buyer remains unknown at present, the move may make UBS Securities the first foreign-controlled broker in China.
The transfer clause also stipulates that the existing shareholders are the preferred purchasers and have a first-option on the transfer. Beijing Guoxiang Asset Management holds a 33 percent stake in the unit, while UBS holds 24.99 percent. Guodian, COFCO and Guangdong Transportation Group each hold a 14 percent stake. If the transferee is ultimately UBS, the Swiss bank will hold 51% of equity and become the controlling shareholder. UBS declined to comment on the report.
Chinese authorities brought in new rules in April allowing foreign investors to hold up to 51% of shares in their local brokerage units in the country. UBS was one of the first to apply to the Securities and Futures Commission to up its shareholding.
Editors: William Clegg