China may raise foreign stake cap in trusts -media
BEIJING, June 10 (Reuters) - China may raise the ceiling on foreign investment in its trust companies to 49 percent, a step forward for Beijing in opening its financial markets to outside players, Caijing Magazine reported.
Investments by foreign firms in Chinese trust companies are currently capped at 20 percent.
The well-respected financial magazine said in its latest issue there was "a very big possibility" that China's banking regulator would push the limit much higher, though it gave no timeline for such a move.
If the cap is increased to just shy of half, it would make trust companies one of the Chinese financial sectors most open to outside money.
Since Beijing overhauled the structure of its trust companies last year, there has been a flood of foreign interest and three deals have been struck.
Britain's Barclays Bank (BARC.L) bought a 19.99 percent stake in New China Trust and Investment Co. National Australia Bank (NAB.AX) picked up a 20 percent stake in Union Trust Investment. And Britain's Ashmore Group (ASHM.L) acquired 19.99 percent of Beijing International Trust, Caijing said.
It also listed a bevy of tie-ups still in the works, some of which have previously been reported:
-- Morgan Stanley (MS.N) is near to taking 19.99 percent of Hangzhou Industrial and Commercial Trust, subject to regulatory approval;
-- Australia's Macquarie Bank (MQG.AX) is aiming for 20 percent of Kunming Trust;
-- Royal Bank of Scotland (RBS.L) is in talks with Suzhou Trust;
-- HSBC (HSBA.L) is looking at deals with Shanxi State Investment and National Trust;
-- Japan's Mitsubishi Trust is in talks with CITIC Trust;
-- Merrill Lynch MER.N is eyeing both Western Trust and Jiangsu International Trust, which UBS is also targeting.
If the ceiling on foreign caps in trusts is raised to 49 percent, that would match the threshold for outside stakes in Chinese fund management companies.
Foreign banks, individually, are restricted to owning 20 percent of a Chinese lender; cumulative foreign investment in a bank is limited to 25 percent. Under pressure from the United States and the European Union, Beijing is reviewing these limits.
There is slightly more breathing space for joint ventures in securities firms, where foreign investors are allowed holdings of up to 33 percent. (Reporting by Simon Rabinovitch; Editing by Alan Wheatley and Keiron Henderson)
