Amid escalating tensions between the United States and China, the latter is pushing forward plans to strengthen its influence in the stock market, and to that end will soon merge domestic broker First Capital Securities Corporation Ltd with smaller Capital Securities Corp, writes Reuters.
Shenzhen-listed firm First Capital, with a market value of $ 6.2 billion, plans to issue new shares for Capital Securities valued at approximately $ 1.4 billion. e places, respectively, can be completed this year.
After the news on Thursday, First Capital shares rose 10%. A 23% stake in the company is owned by the Beijing Municipal Government. He also owns 91.5% of Capital Securities.
According to informed sources, China is not happy with the "unequal rules of the game" - it has opened its stock market to US banks, including Goldman Sachs Group Inc (NYSE: GS ) and Morgan Stanley (NYSE: MS .N), but does not yet see "reciprocity" from the United States.
US firms are battling for share in the Chinese market after Beijing pledged to remove foreign ownership restrictions on securities firms and foreign-invested mutual funds starting in April this year as part of the first phase of China-US trade deal signed in January. Investment banks, including Goldman, now own controlling stakes in Chinese stock market companies and are aiming for 100 percent ownership.
In addition to consolidation, China wants to build firms powerful enough to withstand the Wall Street monsters in the domestic stock exchange industry, which is worth 8 trillion yuan ($ 1.2 trillion) and has more than 130 firms.
"Such mergers are encouraged by the China Securities Regulatory Commission, China" Securities Journal reported.