Shanghai index up while Everbright Securities plunges

By Ye Zhen | August 20, 2013, Tuesday |

Online Edition

Shanghai stocks edged up this morning, bolstered by transportation and technology companies, while Everbright Securities took a hard hit after shares resumed trading after its erroneous transaction on Friday.

The benchmark Shanghai Composite Index added 0.08 percent to 2,087.27 points. Turnover was 48.8 billion yuan (US$8 billion) by midday.

Everbright plunged by the daily limit of 10 percent to 10.91 yuan after resuming trading from a suspension since Friday, when a glitch on the broker’s trading system triggered a spate of buy orders that caused a sudden rally in Shanghai stock market.

Everbright suffered a loss of 194 million yuan on Friday, which accounted for 15 percent of its operating profit in 2012, after placing erroneous orders totaled 23.4 billion yuan, of which 7.27 billion yuan was actually transacted.

“Besides the direct loss, the broker may face downgrade that will lead to an increase in payment to the investor protection fund, as well as possible penalties imposed by regulators and compensation for investors,” Ding Wentao, analyst with Haitong Securities.

Railway shares gained after the central government said it would allow private capital to operate and own intercity and intra-city railway lines.

Daqin Railway Co surged 5.3 percent to 6.98 yuan. Guangshen Railway gained 2.5 percent to 2.49 yuan. CSR Corp Ltd added 2.4 percent to 4.25 yuan.

IT firms continued a strong run on the government’s plan to expand broadband nationwide. Chengdu Dr. Peng Telecom & Media Group Co rose 2.6 percent to 17.21 yuan. Yonyou Software Co gained 1.3 percent to 14.07 yuan.

Finance

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Shanghai index up while Everbright Securities plunges

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