China's futures brokerages are adding capital to prepare for the trading of stock index futures, the securities watchdog said in a conference in Beijing yesterday.
"Fifty futures brokerages out of a total number of 163 firms have completed boosting their capital," said Huang Yuncheng, vice director of the China Securities Regulatory Commission's futures department, adding that 35 of them now have registered capital of more than 100 million yuan (US$13.3 million).
Index futures would give China investors a mechanism to sell short in the stock market, betting on a drop in prices. That may help deflate the nation's rising stocks, the value of which exceeded the 2006 gross domestic product of US$2.8 trillion for the first time on August 9, said Bloomberg News.
Futures brokerages need to meet the regulator's capital requirements to be able to trade and clear stock index futures. Of the futures brokers with the most registered capital, 32 are controlled by securities companies, according to Huang.
(Shanghai Daily September 29, 2007)