J P Morgan And Hsbc To Merge?

J P Morgan has broken its alliance with I-Sec saying that it intends to get out of Asian equity business. HSBC has snapped its alliance with Batlivala & Karani to take complete control of the venture through change of partners. Can these two developments be inter-linked?

Leading investment bankers and brokers say that while on the one hand, J P Morgan is pulling out of equity business in Asia, HSBC continues to strengthen its operations in Asia.

The two developments in India can be absolutely a coincidence. However, nothing can be ruled out, a source closely associated with the two investment banks said.

Sources pointed out that there is a synergy between HSBCs and J P Morgans operations in Asia. If there is a merger between J P Morgan and HSBC, the former will get a strong access to European and Asian business, and the latter will get access to US and Latin American markets. There is a certainly a synergy between the two, said a managing director at a leading investment bank.

There were strong rumours in Hong Kong when stocks of Hongkong & Shanghai Banking Corporation gained in value due to rumours of a possible merger.