China's Jianyin Investment may buy stake in CICC from Morgan Stanley - report

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BEIJING, Jan 15, 2008 (XFN-ASIA via COMTEX) -- BRD | news | PowerRating | PR Charts -- Jianyin Investment Ltd, indirectly owned by sovereign wealth fund China Investment Corp, is considering buying a 34.3 pct stake in China International Capital Corp (CICC) held by Morgan Stanley, the 21st Century Business Herald reported, citing sources familiar with the issue.

Morgan Stanley is reportedly selling its entire 34.3 pct stake in CICC, as it is seeking to set up a new investment banking joint venture with China Fortune Securities, a smaller brokerage based in Shenzhen in southern China.

Jianyin Investment is currently the largest shareholder of CICC with a 43.35 pct stake.

According to the report by the Herald, Jianyin is to take Morgan Stanley's stake in CICC without immediate payment. It will then transfer the stake to Hong Yuan Securities (SZA 000562), in which Jianyin holds 66.67 pct.

Hong Yuan will place new A-shares to Jianyin as consideration for the CICC stake, the report said.

It said Hong Yuan will then issue new A-shares to other investors, with some of the proceeds going towards paying Morgan Stanley.

Eventually, Jianyin will a stakes in Hong Yuan to the CICC, forming a cross-shareholding relationship, the report said.

Morgan Stanley is 9 pct owned by the China Investment Corp.

allen.shu@xfn.com

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