Brokerages punished in margin financing crackdown

    CHINA’S securities regulator said Friday that it would punish four brokerages for their lack of due diligence when connecting to external trading systems, in its latest effort to crack down on grey-market margin financing.

    The four brokerages are Huatai Securities, Haitong Securities, Founder Securities and GF Securities. The brokerages didn’t collect information about the identities of clients who traded stocks through external systems connected to the brokerages, the China Securities Regulatory Commission said. The four will be fined.

    A shares, ETFs allowed as collateral in gold trading

    THE Shanghai Gold Exchange will allow A shares, exchange-traded funds (ETFs) and treasuries to be used as collateral for gold trading.

    The gold exchange also said that it will allow physical gold to be used as collateral on futures contracts from Sept. 29 and physical gold will be permitted to be used for up to 80 percent of margin value.

    China COSCO to order 11 container megaships

    CHINA COSCO Holdings Co., the nation’s shipping and port giant, will order 11 container megaships, joining an array of competitors in their quest to dominate the world’s busiest trade routes.

    The megaships will cost a combined US$1.5 billion and will each carry 19,000 containers from China to Northern European port hubs such as Rotterdam, Netherlands and Hamburg. China COSCO said the order would go to four Chinese yards, which it didn’t name.

    Quota increased for net yuan inflows

    THE People’s Bank of China has increased the quota for net yuan inflows under a cross-border pooling program that enables companies to transfer the yuan between their onshore and offshore entities freely, sources with direct knowledge of the matter said.

    The program that was allowed in the Shanghai free trade zone and later expanded to the whole country last year could help multinational companies optimize their cash management and enhance capital efficiency. The central bank has a formula to calculate how much funds are allowed to enter China on a net basis and the coefficient it uses was increased from 0.1 to 0.5, said the sources. Essentially, the move suggests the amount of net inflows will increase to five times the earlier amount.