HONG KONG: Piyush Gupta, the company’s CEO, announced on Wednesday ( Sep 25 ) that ownership in its China securities joint venture is increasing from 51 % to 91 %.
The comments were made a day after China took extreme measures to boost its struggling business and money markets.
The largest lender by property in Singapore confirmed that it is the buyer of the bets that its Chinese joint venture partners are selling, despite the deal still awaiting regulatory approval.
Gupta stated to reporters at a lecture in Hong Kong that the lender intends to keep a 91 % stake in the system because it believes its Chinese partners are bringing value to the company.
DBS is just the latest international bank to make the most of China’s restrictive international ownership cap, including JP Morgan and Morgan Stanley, which have recently moved to increase stakes in securities joint ventures in the country.
According to data from Shanghai United Assets and Equity Exchange, four Chinese owners of DBS Securities China sold a total of 40 % of the joint venture in July for an asking price of 408 million yuan ( US$ 58.15 million ).
Since then, there have n’t been any updates on buyers or stake transfers.
The decision to increase shares in the China system came as the success of stocks companies operating in China was hampered by a slow economy and sluggish markets.
Securities companies ‘ prospects have increased, though, as a result of Beijing’s announcement on Tuesday, with shares of securities companies listed in Hong Kong rising in night trade.
China’s central bank said it’s introducing a swap programme sized at an initial 500 billion yuan ( US$ 71.24 billion ), which will allow funds, insurers and securities brokers easier access to funding in order to buy stocks.
” I’m positive that these measures of monetary stimulus, as well as the support to real estate market… are enough to stimulate and ( restore ) trust again”, Sebastian Paredes, the bank’s head of north Asia and CEO for Hong Kong, said at the briefing.