DBS plans to raise stake to 91% of China equity stakes, CEO says By Reuters

By Selena Li

HONG KONG (Reuters) – DBS Group ( OTC: ) Chief Executive Officer Piyush Gupta said on Wednesday it was in the process of increasing its ownership in its China securities joint venture to 91 percent from 51 percent.

The comments came a day after China introduced aggressive measures to shore up its struggling economy and capital markets.

Singapore’s biggest bank by assets has confirmed it is the buyer of the shares put up for sale by its Chinese partners, although the deal is still awaiting regulatory approval.

The bank plans to maintain a 91 percent stake in the platform as it sees its Chinese partners bringing value to the business, Gupta told reporters at a briefing in Hong Kong.

DBS is the latest in a wave of foreign banks such as JP Morgan and Morgan Stanley that have moved to raise stakes in China’s securities joint ventures, taking advantage of the country’s foreign ownership limit.

Four Chinese shareholders of DBS Securities China auctioned a total of 40 percent of the joint venture in July at an asking price of 408 million yuan ($58.15 million), according to data from the Shanghai United Assets and Equity Exchange .

It has not been updated since then about buyers or stake transfers.

The move to raise the Chinese unit’s stake came as a slowing economy and sluggish markets squeezed profitability for securities companies operating in China.

However, stimulus measures announced by Beijing on Tuesday boosted the outlook for securities companies, with shares of Hong Kong-listed securities brokerages rising in morning trade.

China’s central bank said it is introducing an initial 500 billion yuan ($71.24 billion) swap program that will allow funds, insurers and securities brokers easier access to financing to buy actions.

“I am convinced that these monetary stimulus measures, as well as the support for the housing market … are enough to stimulate and (restore) confidence again,” Sebastian Paredes, the bank’s head of North Asia and CEO for Hong Kong. , he said at the briefing.

(1 USD = 7.0165 renminbi)

(1 USD = 7.0182 Chinese Yuan Renminbi)