Bank of Communications yesterday teamed up with Jinrui Futures Co to help investors tap gold futures which debut today.

The Shanghai-based lender signed a cooperation deal with Shenzhen-based Jinrui. The bank's holders of the Pacific debit cards can apply for the gold futures at Jinrui. The two partners will also cooperate in e-business, futures deposit settlement and sharing clients resources.

Jinrui has a network in five cities - Shanghai, Shenzhen, Nanchang, Dalian and Zhengzhou.

Shanghai-based BoCom is banking on the gold futures to boost its fee-based income to complement its traditional interest income.

Interest income at BoCom jumped 31.69 percent year on year to 37.74 billion yuan (US$5.19 billion) in the first three quarters of last year, while the lender's commission fees soared 150.15 percent on year to 5.12 billion yuan during the period.

About 70 percent of Chinese banks' profits are generated from interest spread while for overseas banks it sits at about 50 percent.

The gold futures will debut on the Shanghai Futures Exchange today as China's first futures contracts for a precious metal.

Chinese have a traditional frenzy for gold as a hedge against inflation. The current high gold prices are also a draw for investors. Gold prices rose 31 percent last year and topped a three-decade high this year.

However, some analysts and traders also cautioned that futures may not be an easy investment for individuals not familiar with the market.

The Shanghai Futures Exchange has already moved to drive out individuals with a low capacity to take risks, including raising the trading margin requirement and the contract size.

(Shanghai Daily January 9, 2008)