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Morgan Stanley (MS) to Raise Stakes in China Joint Ventures
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Morgan Stanley (MS - Free Report) is joining other major global banks in expanding its presence in China’s lucrative financial markets. Per filings with the Shanghai Stock Exchange last week, the company stated that it is set to buy stakes in its securities and mutual fund joint ventures (JVs) from China Fortune Securities Company for a total of 958.6 million yuan ($150 million).
Specifically, the company will be acquiring an additional 39% stake in Morgan Stanley Huaxin Securities, the securities JV, for 569.6 million yuan ($89.5 million). Further, the company is set to buy 36% interest in mutual fund JV — Morgan Stanley Huaxin Fund Management Company — for 389 million yuan ($60.5 million).
Thus, following the completion of the transactions, Morgan Stanley will have a 90% stake in the securities JV and 85% in mutual fund JV. Notably, the deals are still subject to regulatory approvals.
In a statement, the company said, “These are important steps forward for Morgan Stanley as we look to build a leading, fully integrated financial services firm in China. China continues to be an important strategic priority for Morgan Stanley and we are encouraged by the accelerated pace of opening-up of China’s financial markets.”
Shares of this Zacks Rank #2 (Buy) company have rallied 12.6% over the past three months, outperforming the industry’s growth of 10.9%.
Image Source: Zacks Investment Research
Our Take
Since China fully opened up its $53-trillion financial markets to foreign companies in 2018, several global banks, asset managers and insurers have been making inroads to gain complete control of their local JVs. More than 40 overseas companies have already established JVs, while a few others have applied for greater/majority control.
China has become the second largest equity market globally, and is one of the broadest as well as the deepest growth markets outside the United States. This has led several firms to expand their operations in the country. These efforts will not only help diversify revenues, but also expand global footprint and market share.
Last week, Goldman Sachs (GS - Free Report) received approval from China’s regulators for setting up a majority-owned wealth management JV with ICBC Wealth Management Co. Ltd. Goldman will own 51% of the new JV, while ICBC Wealth Management will have remaining 49% stake.
Additionally, many other companies including BlackRock (BLK - Free Report) , JPMorgan (JPM - Free Report) , Citigroup, UBS Group AG and Credit Suisse have already established JVs in the country or on the verge of getting necessary approvals.
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After a clean sweep of 6 election referendums in 5 states, pot is now legal in 36 states plus D.C. Federal legalization is expected soon and that could be a still greater bonanza for investors. Even before the latest wave of legalization, Zacks Investment Research has recommended pot stocks that have shot up as high as +285.9%
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Image: Bigstock
Morgan Stanley (MS) to Raise Stakes in China Joint Ventures
Morgan Stanley (MS - Free Report) is joining other major global banks in expanding its presence in China’s lucrative financial markets. Per filings with the Shanghai Stock Exchange last week, the company stated that it is set to buy stakes in its securities and mutual fund joint ventures (JVs) from China Fortune Securities Company for a total of 958.6 million yuan ($150 million).
Specifically, the company will be acquiring an additional 39% stake in Morgan Stanley Huaxin Securities, the securities JV, for 569.6 million yuan ($89.5 million). Further, the company is set to buy 36% interest in mutual fund JV — Morgan Stanley Huaxin Fund Management Company — for 389 million yuan ($60.5 million).
Thus, following the completion of the transactions, Morgan Stanley will have a 90% stake in the securities JV and 85% in mutual fund JV. Notably, the deals are still subject to regulatory approvals.
In a statement, the company said, “These are important steps forward for Morgan Stanley as we look to build a leading, fully integrated financial services firm in China. China continues to be an important strategic priority for Morgan Stanley and we are encouraged by the accelerated pace of opening-up of China’s financial markets.”
Shares of this Zacks Rank #2 (Buy) company have rallied 12.6% over the past three months, outperforming the industry’s growth of 10.9%.
Our Take
Since China fully opened up its $53-trillion financial markets to foreign companies in 2018, several global banks, asset managers and insurers have been making inroads to gain complete control of their local JVs. More than 40 overseas companies have already established JVs, while a few others have applied for greater/majority control.
China has become the second largest equity market globally, and is one of the broadest as well as the deepest growth markets outside the United States. This has led several firms to expand their operations in the country. These efforts will not only help diversify revenues, but also expand global footprint and market share.
Last week, Goldman Sachs (GS - Free Report) received approval from China’s regulators for setting up a majority-owned wealth management JV with ICBC Wealth Management Co. Ltd. Goldman will own 51% of the new JV, while ICBC Wealth Management will have remaining 49% stake.
Additionally, many other companies including BlackRock (BLK - Free Report) , JPMorgan (JPM - Free Report) , Citigroup, UBS Group AG and Credit Suisse have already established JVs in the country or on the verge of getting necessary approvals.
Time to Invest in Legal Marijuana
If you’re looking for big gains, there couldn’t be a better time to get in on a young industry primed to skyrocket from $17.7 billion back in 2019 to an expected $73.6 billion by 2027.
After a clean sweep of 6 election referendums in 5 states, pot is now legal in 36 states plus D.C. Federal legalization is expected soon and that could be a still greater bonanza for investors. Even before the latest wave of legalization, Zacks Investment Research has recommended pot stocks that have shot up as high as +285.9%
You’re invited to check out Zacks’ Marijuana Moneymakers: An Investor’s Guide. It features a timely Watch List of pot stocks and ETFs with exceptional growth potential.
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