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 (12.8 billion U.S. dollars) every trading day, triple
the average daily transaction volume for 2006. The figure soared to more than
150 billion yuan (19.2 billion U.S. dollars) 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
70,000 U.S. dollars).
Industry regulators warned that securities firms should adequately upgrade
and supervise trading systems and ensure sufficient
investment.
