UBS Bets on Nasdaq-Style Exchange to Relieve a Ban

September 20, 2019 | Friday



UBS Group AG is relying on the nation's new Nasdaq-style exchange to offset the impact of an underwriting ban in Hong Kong. The firm runs the largest foreign-controlled investment bank in China. In addition to that, Beijing-based UBS Securities Co. aims to improve fees from arranging share sales on technology board, called STAR Market. The goal is to boost 20% of its stock underwriting income from the mainland by December, based on sources who requested not to be identified. Aside from that, the contribution might hit 50% as early as next year. The bank has been working on two first-time offerings, which may increase as high as 3 billion yuan or $423 million.

UBS is one of the two foreign ventures approved to sponsor initial public offerings on Shanghai's STAR Market. And it is hoping that the high commissions from these issuances will somehow mitigate a revenue decline in Hong Kong. Aside from that, the Swiss bank is part of those who'll expand in China. This will take place after taking majority control of its local securities unit. At the same time, the nation unbinds restrictions on foreign participants in its $43 trillion financial industry.

Moreover, he argued Bitcoin's lack of ease of use is the main impediment of the crypto to the mass adoption to date. And Draper believes engineers did not create Bitcoin easy enough for everyone.

Plans of UBS

UBS co-head of investment banking Liu Wencheng stated, "We are actively mobilizing resources to dig and cultivate high-quality tech-innovation companies to tap the opportunity." However, Liu refused to comment directly regarding the plans of the bank for STAR Market. Also, UBS carefully pays attention to the new bourse. And this happened after mainland investment banking revenues, including fees from arranging debt sales, slipped 48% as the number of large deals contracted last year. Then, it faces a fine in March worth HK$375 million or $48 million. This is to settle cases from Hong Kong authorities and became the only foreign bank banned from sponsoring IPOs for a year. Meanwhile, a Hong Kong-based spokesman refused to discuss on the details of UBS' China plans.


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