UBS Stock Climbs 3.69% as Beijing SASAC Prepares to Sell Stake in UBS Securities

In recent developments, UBS has experienced a two-day rise, with its stock increasing by 3.19% on November 29, contributing to an overall gain of 3.69% over the past two days. Despite the fluctuating market conditions, UBS continues to solidify its position in the financial sector.

Amidst this backdrop, the Beijing State-owned Assets Management Co., Ltd. (“Beijing SASAC”) has announced its intention to sell its 33% stake in UBS Securities to the public at a base price of 1.5365 billion yuan. As the second-largest shareholder, Beijing SASAC’s sale would pave the way for UBS Group, which already holds 67% of UBS Securities, to potentially take full control of the joint venture.

Since its inception in 2006, UBS Securities has been a significant player in China's securities market, leveraging its foreign capital background and comprehensive licenses. Covering a wide range of services such as brokerage, investment advisory, and underwriting, UBS Securities has maintained steady performance despite market volatility. In 2023, the company reported operating revenue of 955 million yuan and net profit of 18.91 million yuan. Moreover, by the end of the third quarter of 2024, its operating revenue reached 770 million yuan, with net profit rising to 91.39 million yuan.

The strategic move by Beijing SASAC to divest from UBS Securities could be seen as an effort to optimize its asset portfolio amidst increasing competition as financial markets continue to open up. This divestment would allow Beijing SASAC to concentrate resources on other core business areas for more efficient capital management. Concurrently, UBS Group remains committed to increasing its stake in UBS Securities, reflecting its sustained focus and commitment to the Chinese market. From 2018 to 2022, UBS Group increased its holdings from 51% to 67% and aims for full ownership.

However, UBS Group faces a regulatory hurdle known as the “one client, one control” policy, which restricts foreign institutions from controlling more than one securities business license. To comply, UBS Group has initiated the transfer of its shares in Credit Suisse Securities to Beijing SASAC and others. In June, it reached an agreement to sell its 36.01% stake in Credit Suisse Securities for $91.35 million to Beijing SASAC, clearing the way for further acquisitions of UBS Securities’ shares.

Should UBS Group successfully acquire the additional 33% stake, it would fully own UBS Securities, thereby becoming another wholly foreign-owned brokerage in China. This transition would not only enhance UBS Securities' competitive edge and market influence but also grant it greater autonomy and flexibility within the Chinese market.