China CITIC Securities shares suspended as Bear Stearns talks continue
23/10/2007 16:55
China CITIC Securities today extended the suspension of its stock trading
as talks on collaboration with US investment bank Bear Stearns continued. The
Shanghai-listed CITIC Securities did not reveal details of the collaboration,
but reports said the two sides had reached a preliminary agreement involving a
cross investment of US$one billion each. The government-controlled CITIC
Securities, China's largest listed securities company, will gain a six-percent
stake in Bear Stearns, a leading Wall Street investment and brokerage
firm. Bear Stearns is reportedly seeking to acquire a similar stake in CITIC
Securities, yet the move must be approved China's industry watchdog. The two
sides planned to share management expertise and technologies to provide new
products and services to get a bigger share of China's booming financial
market. They are also considering setting up a joint venture to offer a large
range of financial services across Asia. Burnt by this summer's subprime
mortgage crisis, Bear Stearns was forced to merge two of its mortgage
subsidiaries and cut hundreds of jobs due to heavy losses from mortgages. Market
rumors have Morgan Stanley, Bank of America and HSBC intending to purchase
stakes in Bear Stearns. Earlier media reports said that CITIC Bank, another
listed arm of the state-owned conglomerate CITIC Group, was bidding for a stake
in Bear Stearns. CITIC Bank denied the rumor on Oct. 18. "Our company is
seeking to tide over the domestic market turbulence by going international,"
said Wang Dongming, Chairman of the CITIC Securities.
Xinhua
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