Chinese investment bank Citic Securities has struck a strategic co-investment alliance with Bear Stearns for which both will take a stake of close to $1bn (€707m) in each other, and establish a new Hong-Kong based company to exploit capital markets opportunities in Asia.

The alliance, for which details were being hammered out over the weekend, will provide Chinese and other Asian clients with capital markets services from cross-border mergers and acquisitions advisory to international equity and fixed-income structuring and underwriting, according to Bear Stearns.