Credit Suisse Signs Memo for Chinese JV

Christopher Owen

10 December 2007

Credit Suisse Group has signed a memorandum of understanding with China's Founder Group for a strategic partnership to offer corporate advisory and research services, and to explore cooperation in areas such as domestic institutional brokerage and wealth management. Founder Group, a 21-year-old company backed by Peking University, manages about $8 billion of assets. The Founder Securities arm is one of the 20 largest brokers in the country. The venture would need regulatory approval. Foreign companies can arrange yuan share sales and provide brokerage services only through local ventures with Chinese partners. A deal would narrow the gap between Credit Suisse, Switzerland's second largest bank, and competitors such as Morgan Stanley, Goldman Sachs and UBS, which have ventures that allow them to arrange stock offerings in a nation with CNY39 trillion ($5.3 trillion) of deposits and Asia's second-largest stock market. Chinese companies sold CNY421.2 billion of stocks this year, after the nation's CSI 300 Index more than doubled. The number of stock-trading accounts increased 65 per cent to 126 million in the year through September, according to data from China Securities Depository and Clearing Corp. Founder Group owns five companies listed in China, Malaysia and Hong Kong and more than 20 companies and joint ventures. It acquired Zhejiang Securities in 2002, now called Founder Securities.