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WEALTH MANAGEMENT | Tony Chua, Hong Kong
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Morgan Stanley resells 34.3% stake in CICC

Morgan Stanley's possible $1 billion deal will remove hindrance in expanding its presence in mainland China.

Morgan Stanley asked potential buyers to submit indicative first-round bids Tuesday for its 34.3 percent stake in CICC, according to people familiar with the situation. Expected bidders for the stake include several international private-equity firms.

If consummated, the deal would be a breakthrough for Morgan Stanley. The Wall Street bank helped found CICC together with China Construction Bank Corp. in 1995, a pioneering move at the time. But after disputes emerged with the venture's management over personnel, the firm's culture and its dealings with other foreign banks, Morgan Stanley became a passive investor.

Morgan Stanley hopes to form a joint-venture securities firm with Shanghai-based China Fortune Securities Co., in which it can have more influence over management, according to a report in Wall Street Journal.

Chinese regulators won't approve a new securities joint venture for Morgan Stanley unless it sells the CICC stake.

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