China just allowed two American banks access to its domestic market, in an opening not seen for 6 years, according to the FT.JPMorgan and Morgan Stanley were both granted approval to open joint ventures on the Chinese mainland. These JV partnerships will see both banks invest in different companies in Shanghai that sell and market securities.
- JPMorgan will own 33% of a firm started with First Capital Securities
- Morgan Stanley will own 33% of a firm it starts with Huaxin Securities
Several major international banks already have JV partnerships in China, like Goldman Sachs and UBS. But a licence has not been given to a U.S. bank in 6-years, so this is a significant coup for JPMorgan and Morgan Stanley.
These deals will let JPMorgan and Morgan Stanley both sell securities in China and get in on the IPO market in Shanghai, which they have thus far been unable to do.
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