CITIC ceases deal with Bear Stearns

CITIC securities<600030>, China's largest publicly traded securities company, formally announced on Wednesday that the company had called off the deal to buy into the Bear Stearns.

The company had cancelled all negotiations on cross-investment and a proposed joint venture with Bear Stearns. However, it said that it would still seek other overseas investment opportunities despite the cease-fire.

CITIC and the U.S. lender, Bear Stearns, which was taken over by J.P. Morgan Chase & Co. over the weekend, reached an agreement last November to invest US$1 billion in each other and build a joint venture in Hong Kong.

However, the stock of both sides had dropped over 50% since the deal was agreed on. Share prices of CITIC and Bear Sterns were approximately RMB 105 and US$120 respectively at that time, but declined accordingly to RMB 56.14 and US$4.7 on Tuesday.

Net profit of CITIC Securities in 2007 saw a five-fold increment to RMB 12.39 billion, or RMB4.01 per share, according to the company's final earnings report for 2007.