Morgan Stanley Set to Take Full Control Over China Securities Unit

Morgan Stanley, the sixth-largest US bank by assets, is set to obtain full ownership of a joint venture in China, giving it greater control of its mainland securities unit as the country’s financial sector further opens up to foreign banks. The Wall Street bank currently owns about 90 percent of its China securities firm, which has a license to trade domestic shares.

The American investment bank’s partner, China Fortune, plans to sell a 4 percent stake in Morgan Stanley Huaxin Securities at a price of 698 million yuan ($110 million), the company said in filings with the Shanghai Stock Exchange on Wednesday.

The sale would give Morgan Stanley a 94 per cent stake in the securities joint venture, with the remaining 6 percent held by China Fortune. The US bank also owns an 85 percent stake in Morgan Stanley Huaxin Fund Management Co. Ltd., a mutual fund manager it formed with the state-owned company.

Outright ownership of its venture, which mostly provides investment-banking services and research, allows Morgan Stanley to expand their operations in the multitrillion-dollar Chinese financial sector. It also enables the banking giant to better integrate them with its global businesses.

Morgan Stanley joins several other foreign banks who are looking to take full ownership of their Chinese businesses after Beijing scrapped foreign ownership limits in the securities and mutual fund industry.

Chinese President Xi Jinping said that the nation would accelerate the opening up of its financial sector, including measures to facilitate foreign access to the Chinese insurance industry and easing restrictions for entry and expansion of foreign financial institutions.

Morgan Stanley massively increases Bitcoin exposure

Elsewhere, Morgan Stanley has been moving this year to offer cryptocurrency investment products because the global banks were seeing deep-pocket investors sending money to crypto exchanges and digital-asset managers, such as Coinbase and Grayscale.

Morgan Stanley also got involved in cryptocurrencies, launching access to three funds that enable ownership of bitcoin. The bank’s wealthier clients with “an aggressive risk tolerance” and have at least $2 million in assets can invest up to 2.5% of their net wealth in bitcoin funds.

Morgan Stanley has recently increased its cryptocurrency exposure manyfold. Counterpoint Global, its $150 billion investing arm, has invested $500 million in business intelligence company, MicroStrategy, which converted its entire cash balance to bitcoin.

Although Morgan Stanley has added more momentum by moving to open up access to bitcoin funds, Wall Street banks’ interest in bitcoin has been already building up over the last few months.