HSBC, BoCom to invest in Xiangcai
(Shenzhen Daily/Agencies)
Updated: 2006-02-23 13:19

HSBC Holdings Plc. and Bank of Communications (BoCom) are to invest in Shanghai-based Xiangcai Securities Co., The Economic Observer reported, citing unnamed sources.

The amount of funds HSBC and Bank of Communications would inject into Xiangcai hasn't been decided yet, the report said.

In principle, Bank of Communications will take a stake in Xiangcai at a "low cost," according to the report, but it didn't say how much Bank of Communications would pay.

The deal would be part of a restructuring of the brokerage that could begin as early as this month, and Bank of Communications and HSBC would take "absolute control" of Xiangcai, the newspaper said.

HSBC took a 19.9 percent stake in Shanghai-based Bank of Communications in 2004. Bank of Communications has since listed in Hong Kong.

Wang Jun, general manager of Xiangcai's marketing department, declined to comment on the brokerage's restructuring. Song Feng, an official in the public relations department at Bank of Communications, said Monday he couldn't confirm a report that Bank of Communications is to invest in Xiangcai.

Gareth Hewett, a spokesman for HSBC in Hong Kong, declined to comment on the report.

The report came as foreign banks, which have been rushing to take stakes in Chinese banks, are also looking for possible investments in local brokerages.

In October, a source close to the matter said Xiangcai was in separate talks with HSBC, Credit Suisse First Boston Corp. and Citigroup Inc. on investment in the brokerage.