Although both companies declined to comment, analysts surmised that the rising stock market in China boosted the value of Soochow Securities to a level that Mellon did not want to pay. "The surge in the market has prompted the broker to readjust the pricing point for its stake to a level that the foreign party deemed unacceptable," one analyst told Financial Times.
Nonetheless, Mellon is expected to announce any day now that it will open an office in Beijing, where it will hire analysts to do market research and lobbyists to work with regulators.
There currently are 20 joint ventures between Chinese fund companies and foreign firms, accounting for a 30% market share. Few, if any, foreign firms have struck partnerships with Chinese firms in other areas of investment management, including insurance, brokerage and retail banking.
