Bank gets nod for trading in paper gold
18/1/2005 8:13
Shanghai Daily news
The Agricultural Bank of China
has become the second mainland lender to offer trading in gold certificates to
its retail customers. The Beijing-based lender, one of China's big-four
state-owned commercial banks, said yesterday that it received permission from
the China Banking Regulatory Commission to offer financial instruments whose
returns are based on gold prices. Gold trading services will be launched
nationwide before the Spring Festival next month, Yang Kun, a bank vice
president, said in a statement. Individuals will be able to trade gold
bullion through special accounts without physically acquiring the precious metal
- transactions that are referred to as "paper gold." In addition, the bank
also has plans to offer trading in actual bullion. Zhou Xiaochuan, governor
of the People's Bank of China, the country's central bank, said earlier that
China will encourage more banks to provide individual gold trading services to
boost the metal's role as an investment vehicle. The introduction of gold
sales is part of a larger effort to expand investment options. China's citizens
set aside 1.59 trillion yuan (US$191.5 billion) in savings by the end of last
year. The Bank of China, another big-four lender, received approval to
conduct individual gold trading on December 17. China deregulated its gold
market in late 2002, when the Shanghai Gold Exchange began operations for
institutional investors.
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