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Brokers can sell bonds soon
( 2003-09-01 09:15) (Shanghai Daily)

Chinese securities companies will be allowed to sell corporate bonds to expand their access to capital financing from October 8, said the China Securities Regulatory Commission on Saturday.

The move follows a promise made by Shang Fulin, chairman of the securities regulatory body, to heads of more than 60 of the country's leading brokerage firms in a closed-door meeting in early August in Beijing.

"Through selling bonds, securities firms will be able to improve their financing structure, maintain sustained growth, enhance comprehensive competitiveness and strengthen resistance to risks," said the securities regulator in a statement.

Securities firms selling bonds will be required to have a net asset value of up to 1 billion yuan (US$120.48 million) and to have reported profitability in the previous year.

The amount of the bond sales will be limited to no more than 40 percent of the company's net asset value. The debt, whose maturity can range from one year to five years, can be sold to either public investors or qualified corporate investors whose asset value should be more than 20 million yuan.

China Galaxy Securities Co Ltd, which has the most number of outlets in the country, will reportedly apply for the bond sales soon.

At present, domestic brokers get limited access to financing, and the latest move could not have come sooner as China's 124 securities firms have been hurt by low profit margins due to the bearish stock market.

A report by Industrial Securities Co Ltd showed the industry lost nearly 2.6 billion yuan last year amid a 17-percent drop in the equities market, which has led to shrinking revenues in the stock-broking and investment banking businesses.

Fifty-one out of the country's 124 securities made losses last year.

Analysts believe the permission to sell bonds would provide an incentive to both brokers and, perhaps, revive the sluggish stock market, but they also are doubtful whether investors would respond warmly.

"It will help securities companies pull through the tough time, but investors need to think whether it is reliable to lend money to brokerage houses under such circumstances," said Dai Ming, analyst at Dagong International Credit Rating Co Ltd.

The securities regulator said it is also considering other means to widen the sources of capital for struggling brokers.

Mourners threaten revenge

Hundreds of thousands march in Iraq

Beating their chests and calling for revenge, more than 300,000 Muslims began a two-day, 177-kilometer march from Baghdad to the holy city of Najaf yesterday to mourn a cherished Shiite leader who was assassinated in a car bombing that killed at least 85 people.

The faithful followed a flatbed truck carrying a symbolic coffin for Ayatollah Mohammed Baqir al-Hakim, a moderate cleric and Saddam Hussein opponent.

Authorities said they could only find al-Hakim's hand, watch, wedding band and pen in the wreckage.

"Our revenge will be severe on the killers," read one of the many banners carried by mourners. Red and white roses were laid on the coffin and a large portrait of al-Hakim was placed in front of it.

The Iraqi police handling the investigation into Friday's bombing say they have arrested 19 men - many of them foreigners and all with admitted links to al-Qaida - in connection with the blast.

However, many Shiites blame the cleric's death on Saddam Hussein loyalists and the US-led coalition, which they say has failed to provide adequate security in Iraq since Saddam's fall.

"Saddam and Bush will not humiliate us," read another banner.

The procession began at the al-Kadhimiyah Shrine, one of Baghdad's most sacred Shiite sites, and was expected to grow as it weaved its way southward. The marchers were to stop at holy sites in Karbala before arriving at the blast site, Najaf's Imam Ali Shrine, for the funeral tomorrow.

Police detained two Iraqis and two Saudis shortly after the Friday attack, and they provided information leading to the arrest of 15 other suspects, said a senior police official in Najaf. Two Kuwaitis and six Palestinians with Jordanian passports were among the suspects, the official said.

The remainder were Iraqis and Saudis, the official said, without giving a breakdown.

Initial information shows the foreigners entered Iraq from neighboring Kuwait, Syria and Jordan, the official said, adding that they belong to the Wahhabi sect of Sunni Islam.

"They are all connected to al-Qaida," the official said.

Wahhabism is the strict, fundamentalist branch of Sunni Islam from which al-Qaida leader Osama bin Laden draws spiritual direction. Based in Saudi Arabia, its followers show little tolerance for non-Wahhabi Sunnis and Shiites.

Al-Hakim had only returned in May from exile in Iran. While backing the formation of an Islamic state in Iraq, he had also urged unity among rival Shiite factions and tolerance of the American-led coalition.

Police said there were similarities between the mosque bombing and two recent attacks.

The bomb at the Imam Ali Shrine - the burial place of the son-in-law of the Prophet Muhammad - was made from the same type of materials used in the August 19 truck bombing at the UN headquarters in Baghdad, which killed 23 people, and the Jordanian Embassy vehicle bombing on August 7, which killed 19, the Iraqi official said.

US officials have not confirmed any details of the arrests, which would substantiate Bush administration claims that bin Laden's followers have taken their war against the United States to Iraq.

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