BEIJING, June 6 -- Dutch banking giant ABN AMRO plans to cooperate with Haitong Securities Co., one of China's largest brokerages, in a move that industry executives said might ultimately lead to the purchase of a stake.

    ABN AMRO said June 5 it had signed a memorandum of understanding (MOU) with Shanghai-based Haitong to explore tie-ins across a wide range of businesses, such as corporate finance advisory services, asset securitization, cross-border capital raising, financial market products, and brokerage activities.

    Haitong Securities, listed by accountants KPMG as China's fourth-largest broker by total income in 2004, is eager to secure a foreign strategic partner as it undertakes a yearlong internal restructuring, industry sources said in February.

    Potential foreign buyers, including ABN AMRO, Bank of Montreal and JP Morgan Chase & Co., have approached Haitong since last year, the sources said in February.

    "We view the MOU as a creative step forward into the securities-related businesses in China," Jeroen Drost, chief executive for ABN AMRO in Asia, said in a statement.

    "Haitong's innovative status and leading industry position coupled with our bank's global clients and product franchise should produce commercial results quickly," Drost added.

    The statement did not mention the possibility of a stake purchase. An ABN AMRO spokeswoman declined to comment on the matter yesterday.

    But a Shanghai-based financial industry executive said that the MOU seems a signal that the two parties are pursuing some sort of partnership. This also increases the possibility of an eventual purchase deal, though now is not good timing.

    The executive, who declined to be identified, said that although ABN AMRO had completed initial due diligence for the possible purchase of a stake last year, talks were stalled over the price and size of the deal.

    Industry analysts also believe it is unlikely for domestic regulators to approve new foreign investments in the nation's brokerage sector this year as the government has yet to clarify its policy on foreign ownership in the sector.

    Foreign securities firms have been increasing their cooperation with local brokerages, some even launching joint-venture securities firms.

    ABN Amro doesn't have a joint-venture securities firm in China now, but does have a 49 percent stake in a fund-management joint venture, ABN AMRO TEDA Fund Management Co. Its partner in that venture is Tianjin-based Northern International Trust & Investment Co.

(Source: Shenzhen Daily/Agencies)