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Morgan Stanley, Goldman Receive Go-ahead for Majority Stakes in Chinese Ventures

Goldman Sachs and Morgan Stanley stated Friday that they had received the final regulatory permissions to take majority stakes in the China securities joint ventures, as Beijing continues to open its financial markets to foreigners.

Morgan Stanley, Goldman Receive Go-ahead for Majority Stakes in Chinese Ventures

The permissions come as policymakers and authorities increase efforts to shield the world’s second-largest economy, battered by the coronavirus pandemic.

Goldman and Morgan Stanley received the go-ahead from the China Securities Regulatory Commission to boost their holdings in Goldman Sachs Gao Hua Securities and Morgan Stanley Huaxin Securities from 33% to 51% and 49% to 51%, respectively, the two Wall Street banks stated in separate statements.

The majority ownership of the joint ventures probably permits the U.S. banks to expand businesses in China, and better add them with their global companies.

Goldman in 2004 formed its China securities JV with Beijing Gao Hua Securities, which was co-founded by veteran Chinese banker Fang Fenglei.

In contrast to most of the other China JVs, Goldman already has day-to-day operational control of its JV, which affords investment banking companies such as equities and bond underwriting and deal advice.

Regardless of that managerial control, Goldman has long made it clear it might ultimately seek to take a majority holding too.

Shanghai-based Morgan Stanley Huaxin Securities was established back in 2011 and its existing operations include underwriting and sponsoring equity and debt offerings in addition to proprietary trading of bonds, it says on its website.

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