Reuters Insider - Inside the News: China's Green Light to Wall St Banks

China Holdings

13/06/2016 11:06

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 Source:             Thomson Reuters                                   
                                                                       
 Description:        Chinese regulators give approval to the banking   
                     joint ventures of J.P. Morgan Chase and Morgan    
                     Stanley, bringing them a step closer toward       
                     operating securities businesses in China.         
 
 
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Transcript (May be auto-generated)

                 Inside the News, midday Hong Kong on Friday, January 7. A new dawn for Wall 
Street banks in China. JP Morgan and Morgan Stanley gained approval to 
underwrite deals in the country's securities market. JP Morgan will link up with
Shenzhen-based First Capital Securities and hold 33% of the venture. For Morgan 
Stanley, the green light allows it to move on with its Chinese partner Huaxin 
Securities and tap into the fast-growing stock and bond markets. Here's Reuters 
Mike Flaherty on what this means for foreign banks. Thanks, Cathy. I think the 
real story here is the JP Morgan approval. This is JP Morgan's first securities 
joint venture in China. It's a place that they've been absent for, forever 
really. And so the ability for them to tap into that market is obviously a huge 
opportunity. For Morgan Stanley, this has been the long-drawn out effort to 
depart from CICC and open a new joint venture where it has more management 
control and can underwrite securities with those licenses. Obviously, each bank,
as well as several European banks have these joint ventures to try to capitalize
on China's booming stock and bond markets. Many thanks for that, Mike. More 
China banking news. Minsheng is planning to raise around $3 billion by selling 
new shares. That's according to the Bloomberg News Agency, which says Minsheng 
needs to replenish its capital. It says the bank, China's first non-state-owned 
lender, will announce a private placement as early as today following a board 
meeting. Facebook sets the stage for a possible IPO. 

Data seen by Reuters shows the social networking site is generating profits at a
faster-than-expected rate. Net income was $355 million in the first nine months 
of the year on revenues of $1.2 billion. A document distributed by Goldman Sachs
to its wealthy clients suggests Facebook could attract so many investors this 
year that it will have to disclose financial data similar to a publicly-traded 
company. Turning to the markets, Asian equities mostly sliding in morning trade,
with all the major indices in the red. One early loser is Samsung Electronics. 
It disappointed markets with weak quarterly earnings estimates. Here's Insider's
Rafael Nam. If Samsung is considered by many to be the closest competitor to 
Apple this year in terms of those fields, two words of caution. 

First is that tablets and mobile phones happen to be the one area where every 
consumer electronics company wants to get into this year. And second, look at 
the stock in Samsung, it's been trading at record highs as early as Monday but 
some technical indicators are showing that the stock is way overbought. Check 
out that Relative Momentum Index, for example, and that could be an early 
warning sign for Samsung. In currencies, the Euro falls to an almost four-month 
low against the Dollar; sovereign debt worries resurface. The Euro trading well 
below the 200-day moving average after breaching 1.30. 

Next week sees around EUR24 billion in new European government debt supply 
hitting the market, including bond issues from Italy, Portugal, and Spain. 
Australia's Flood Recovery Chief says rebuilding Queensland's infrastructure 
could take years. The floods have affected 22 towns and cities across Queensland
and disrupted coking coal supplies, flooded mines and damaged crucial coal rail 
lines. Tune in to Reuters Insider for a breakdown of the December jobs report 
and what it means for the Fed's controversial bond buying program. We'll go 
inside the numbers with the experts from PIMCO, Wells Fargo and IFR. That's at 
08:28AM New York time. I'm Cathy Yang, this is Reuters