China's securities brokers are profiting from robust trading and
attracting more individual investors, but their trading systems are
failing to cope with the huge volume of business.
Since the beginning of the year, turnover on the two Chinese
bourses has averaged 100 billion yuan (US$12.8 billion) every
trading day, triple the average daily transaction volume for 2006.
The figure soared to more than 150 billion yuan (US$19.2 billion)
on Monday.
At the Shenzhen marketing center of Guosen Securities, the
business hall was packed out, with investors queuing in front of
counters.
One investor complained, "There are more people here than in
banks. I have been waiting for more than one hour, but it's still
not my turn."
Some newcomers, unaware of risks of the stock markets, require
explanations from brokers.
Sources with the marketing center said hundreds of new accounts
were opened in each of the past few days.
Another securities firm, China Merchant Securities, has opened
nearly 20,000 new stock accounts since the beginning of 2007,
company officials said.
However, the volume of new accounts has caused bottlenecks in
its stock trading systems and the overload has incurred losses for
investors.
Industry insiders pointed out that insufficient investment in
trading systems and a lack of awareness of risks accounted for the
trouble.
Last year witnessed a string of incidents resulting from
inadequate administration of trading systems.
On Jan. 7, 2006, the databank broke down at a securities firm,
breaking off business in 40 outlets of the company. Operations
resumed two hours later.
On March 29 and 30, another securities firm fell victim to
online fraud, which caused losses to 11 stock accounts.
On April 12, repeated contracts occurred at a third securities
firm, which led to overdrafts at 36 stock accounts, involving more
than 570,000 yuan (about US$70,000).
Industry regulators warned that securities firms should
adequately upgrade and supervise trading systems and ensure
sufficient investment.
(Xinhua News Agency January 24, 2007)