State-controlled Chinese brokerage Everbright Securities Co (光大證券) reported a trading loss of 194 million yuan (US$31.7 million) and apologized to investors after errors in order-execution system sparked the biggest intraday swing in China’s benchmark index since 2009.
Everbright said the incident on Friday “brings negative impact to the company’s brand reputation and market image,” according to a statement submitted to the Shanghai Stock Exchange yesterday.
Everbright may face regulatory penalties that could affect its business development and results, it said.
“The final loss cause to the company and influence on the company’s financial status may change,” Everbright said. “We feel deeply disturbed, and with a heavy heart, we would like to deliver our most sincere apology to investors.”
The incident, which touched off a 53 percent surge in trading volumes in the Shanghai Composite Index, echoed the May 2010 “flash crash” in which the Dow Jones Industrial Average fell almost 1,000 points before rebounding.
Internal controls at Everbright were “obviously flawed” and no human errors were detected, the China Securities Regulatory Commission (CSRC) said in a statement posted on its Web site yesterday.
Everbright detected order-generation and execution defects in an arbitrage-trading system in the company’s strategic investment department, the company said in its statement yesterday.
The company held a news conference yesterday evening that was only open to invited journalists.
At the briefing, Everbright said it would deal with “spot goods and stocks” and will communicate with the exchange about details, 21st Century Business Herald reported on its Web site.
Everbright’s trading system placed an accumulated 23.4 billion yuan of buy orders, of which 7.27 billion yuan was transacted.
The brokerage sold 1.85 billion yuan in exchange-traded funds, along with short-selling 7,130 contracts of index futures, according to the statement on the CSRC Web site.
The Shanghai Composite Index jumped from a loss of as much as 1 percent to a gain of 5.6 percent in two minutes during the morning session, as 16 of the measure’s 20 biggest companies by weighting increased by the 10 percent daily limit.
The gauge closed with a loss of 0.6 percent.
The securities regulator said today all stock market trading on Friday was effective, and its Shanghai branch has suspended the company’s relevant businesses.
The stock has declined 14 percent this year, surpassing the 8.8 percent fall in the equity benchmark.
The brokerage’s profit has declined for three straight years, with net income falling 35 percent to 1 billion yuan last year, according to a March exchange filing. It is scheduled to report first-half earnings on Thursday.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”