UBS has won a bookrunner role on what is expected to be the largest Shanghai stock market listing of the year, three months after becoming the first international bank to receive permission from the Chinese government to lead domestic share sales.
PetroChina has selected UBS, along with CITIC Bank, to lead its $5.8bn Shanghai market listing, in what will be the Swiss bank's second Chinese domestic market mandate. UBS Securities, the bank's Chinese subsidiary, was only incorporated last December, and earlier this year became the first offshoot of an international bank to gain a full set of investment banking licenses to operate in the country.
UBS last year paid $200m for a 20% stake and management control of Beijing Securities, which is now called UBS Securities, and has transferred 70 staff from its Hong Kong office to the mainland business, as well as retaining 200 former Beijing Securities employees. UBS has effective control of the business's 11 strong management board, and exercises day-to-day control over the business.
Next month, UBS will complete its first Shanghai flotation with the $600m market debut of Western Mining, which comes ahead PetroChina's sale of 4 billion shares to Chinese investors. PetroChina's is expected to be the largest domestic market deal of the year so far, beating Industrial Bank's $2.1bn January listing.
Goldman Sachs is also able to operate on the Chinese domestic market through a joint venture with a local broker that allows it to provide some investment banking services to clients in the country. A spokesman for UBS in Hong Kong declined to comment.