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People walk past the Shanghai Branch of
China Citic Bank in Shanghai, east China, April 26, 2007. China Citic Bank
was listed simultaneously on the Shanghai and Hong Kong stock exchanges in
the form of "A+H" on April 27, as the second of its kind after the
Industrial and Commercial Bank of China in the Chinese inland. (Xinhua
File Photo)
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BEIJING, Oct. 17 -- Leading financial firm China CITIC
Group (CITIC) is bidding for a stake in Bear Stearns, one of Wall Street's top
investment banks, top officials said yesterday in Beijing.
Jiang Dingzhi, vice-chairman of the China Banking
Regulatory Commission, and Chang Zhenming, president of CITIC Group, said the
group is keen on a stake in the U.S. bank.
Neither Jiang, speaking on the sidelines of the
Communist Party of China's (CPC) 17th National Congress on efforts by Chinese
financial companies to expand abroad, nor Chang would reveal any more details
such as the size of the stake or the price.
Bear Stearns ranked 7th among Wall Street investment
banks by revenue before it suffered the hardest from the U.S. subprime credit
crisis, which has caused its market value to drop as much as 25 percent this
year to 17.4 billion U.S. dollars.
Warren Buffett, the billionaire chairman of Berkshire
Hathaway Inc, is also interested in buying a stake in Bear Stearns, the New York
Times reported on Sept. 26. Other potential investors are Bank of America Corp,
Wachovia Corp and China Construction Bank.
"At the moment, Bear Stearns is a bargain," Arthur
Lau of JF Asset Management in Hong Kong told Bloomberg. For China, it's
important to have a platform to learn more about investment banking, he said.
Wu Yonggang, an analyst with Shanghai-based Guotai
Junan Securities, said buying a stake in Bear Stearns will help CITIC connect
the booming domestic capital market with the United States.
CITIC owns 26 percent of CITIC Securities, the
Chinese brokerage whose market value has more than quadrupled this year to 50
billion dollars, making it Asia's largest securities firm. The company also
controls 62 percent of China CITIC Bank Corp, which raised 5.95 billion dollars
in a Hong Kong initial share sale in May.
"By expanding overseas, CITIC will gain valuable
experience in a leading investment bank," Wu said.
"But Chinese companies are not familiar with the
overseas market or international merger and acquisition issues, and that could
be a disadvantage, " he warned.
China Minsheng Banking Corp, the mainland's first
privately owned bank, said earlier this month said it may buy a stake in UCBH
Holdings Inc, the biggest bank serving the Chinese community in the United
States.
(Source: China Daily)
