In its China Fortune brokerage joint venture in China, Morgan Stanley (MS.N) is set to increase its stake by 4.06% to 94%, putting it back on track to take full ownership of the business, an exchange filing showed on December 29.
According to an exchange filing by China Fortune, the registered capital of the unit, a venture formed by Morgan Stanley and China Fortune Securities Co in 2011, valued at 1.71 billion yuan, the firm will be boosted when the U.S. bank injects 698 million yuan ($110 million).
On Wednesday, the Shanghai-based state-owned company said that its decision to sit out the capital injection effectively allows its ownership to dilute to 5.94% from the previous 10%.
The China Securities Regulatory Commission (CSRC) and other government authorities need to approve the change. Morgan Stanley refused to comment on the matter.
In July, 39% of the joint venture was acquired by the Wall Street bank from China Fortune, taking its ownership to 90%. The unit was then rebranded as Morgan Stanley Securities China Co Ltd. Since 2019, when China first permitted foreign-majority ownership in some financial businesses, global banks and asset managers have been boosting their stakes in their Chinese joint ventures.
In their brokerage joint ventures in China, eight international banks have become the majority shareholders.
($1 = 6.3683 Chinese yuan renminbi)