Credit Suisse, Founder Securities JV Gets License
30.12.08, 09:19 Uhr
BEIJING -(Dow Jones)- Credit Suisse Group (CS) said Tuesday its brokerage joint venture with Founder Securities Co., which was set up earlier this year, has received a license from China's securities regulator to sponsor and underwrite yuan-denominated A shares.
Credit Suisse said in a statement its joint venture with the securities arm of Chinese conglomerate Founder Group will also sponsor and underwrite government and corporate bonds in China. Bond issues are likely to rise markedly next year to fund Beijing's investment plans.
Kai Nargolwala, Credit Suisse chief executive in Asia Pacific, said in the statement that despite current market sentiment, China's investment banking sector remains "a coveted crown jewel" for global bankers seeking to expand in emerging markets.
China's stock market has slumped by around 70% after peaking at an all-time high of 6124.04 on Oct. 16 last year due to downturns in the domestic and global economies.
Wei Xin, chairman of Founder Group, said in the statement the joint venture "is entering the market at a crucial time, as China continues to see solid demand for corporate finance services and clients increasingly look to quality of advice."
In June, the China Securities Regulatory Commission approved the formation of the joint venture, Credit Suisse Founder Securities Ltd., which is 33.3%-owned by Credit Suisse. The remainder is owned by its Chinese partner.
It was the first such approval since China eased rules in December 2007 on the establishment of joint ventures between foreign and domestic securities companies.
Founder Securities Chairman Lei Jie has been appointed chairman of the Beijing-based joint venture and Neil Ge, a managing director at Credit Suisse's Investment Banking Shanghai Representative Office, has been named chief executive, according to the statement.
China's government plans to issue more government bonds next year and encourage the sale of corporate bonds as part of efforts to finance planned investments over the next few years.
Beijing has announced a CNY4 trillion stimulus plan to support investments in infrastructure projects and rural areas to try to prevent a sharp economic downturn.
Kai Nargolwala, Credit Suisse chief executive in Asia Pacific, said in the statement that despite current market sentiment, China's investment banking sector remains "a coveted crown jewel" for global bankers seeking to expand in emerging markets.
China's stock market has slumped by around 70% after peaking at an all-time high of 6124.04 on Oct. 16 last year due to downturns in the domestic and global economies.
Wei Xin, chairman of Founder Group, said in the statement the joint venture "is entering the market at a crucial time, as China continues to see solid demand for corporate finance services and clients increasingly look to quality of advice."
In June, the China Securities Regulatory Commission approved the formation of the joint venture, Credit Suisse Founder Securities Ltd., which is 33.3%-owned by Credit Suisse. The remainder is owned by its Chinese partner.
It was the first such approval since China eased rules in December 2007 on the establishment of joint ventures between foreign and domestic securities companies.
Founder Securities Chairman Lei Jie has been appointed chairman of the Beijing-based joint venture and Neil Ge, a managing director at Credit Suisse's Investment Banking Shanghai Representative Office, has been named chief executive, according to the statement.
China's government plans to issue more government bonds next year and encourage the sale of corporate bonds as part of efforts to finance planned investments over the next few years.
Beijing has announced a CNY4 trillion stimulus plan to support investments in infrastructure projects and rural areas to try to prevent a sharp economic downturn.
DJG/dok
