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Monday April 25, 05:39
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IFC to acquire stake in Chinese investment bank
(by Roy Deng)
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International Finance Corp., the World Bank’s private lending unit, intends to buy 5% of Changjiang BNP Paribas Peregrine Securities Co., a Chinese investment bank one-third owned by France’s second-biggest bank.
This is the first time International Finance Corporation purchases a stake in a Chinese investment bank or securities company. Still, the acquisition has to be approved by the new shareholding structure, the China Securities Regulatory Commission, IFC spokesman Desmond Dodd said.
Since 1985, IFC has proceeded with active investment activities towards different projects in China. For instance, it has spent $150 million on the purchase of stakes in five Chinese commercial banks in the past four years.
In 2002, IFC announced it had plans to invest up to $12 million to buy a 16% equity interest in BNP’s China venture, though the investment has been never put into effect.
Under agreements allowing China to enter the World Trade Organization several investment structures have been established since 2001. According to those agreements foreign participation in domestic investment banks is limited to 33%. Since that time, many international companies became high-rated investors of the region. Among them are such giants as Morgan Stanley, Goldman Sachs Group Inc., Merrill Lynch & Co. etc.
Looking backward, Morgan Stanley was the first overseas securities firm to start an investment banking venture in China with China Construction Bank in 1995. At the moment Morgan Stanley owns a third of China International Capital.
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