Morgan Stanley (MS.N) is set to increase its stake in its brokerage joint venture in China by 4.06% to 94%, an exchange filing showed on Wednesday, putting it on track to take full ownership of the business.
The United States bank will inject 698 million yuan ($110 million) to boost the registered capital of the unit, a venture formed by Morgan Stanley and China Fortune Securities Co in 2011, to 1.71 billion yuan, according to an exchange filing by China Fortune.
The Shanghai-based state-owned company said on Wednesday that it had decided to sit out the capital injection, which effectively allows its ownership to dilute to 5.94% from the previous 10%.
The change requires the approval of the China Securities Regulatory Commission (CSRC) and other government authorities.
Morgan Stanley declined to comment.
The Wall Street bank acquired 39% of the joint venture from China Fortune in July, taking its ownership to 90%. It rebranded the unit as Morgan Stanley Securities China Co Ltd.
Global banks and asset managers have been boosting their stakes in their Chinese joint ventures since China first permitted foreign-majority ownership in some financial businesses in 2019.
Eight international banks have become the majority shareholders of their brokerage joint ventures in China. ($1 = 6.3683 Chinese yuan renminbi)
Reporting by Selena Li; Editing by Sumeet Chatterjee