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Securities houses under pressure of soaring online trading
(Shanghai Daily)
Updated: 2007-01-29 15:32 After years of losses, China mainland's benchmark Shanghai Composite Index soared 130 percent last year and extended gains this month after a "money-making" effect spurred more capital to enter the market. Stock turnover in Shanghai has averaged 83 billion yuan (US$10.7 billion) per session so far this year, a blistering increase from a daily average of 24 billion yuan in 2006, according to data from the exchange. "Since November, I have increasingly felt that I needed more patience when trying to log onto the stock trading platform," said Xu Zhibo, a 10-year stock investor who trades online. "Some log-in failures cost me golden chances to buy shares and even wiped out my potential gains when I couldn't do anything." Although investors can choose to go to brokers' outlets or call in orders via telephone, a growing number now prefer to use the Internet thanks to its convenience and efficiency. But as online trading became slower due to the increase in users, some investors tried phone-based services, only to find they could not be put through for 30 minutes if markets were volatile. "I ended up going to my broker's outlet and a lot of people were struggling to get a computer to trade," said Song Wenmin, a 25-year-old sales manager who just started buying stocks at his office online. "I couldn't stay long as I had to be back at work. That's really troublesome." Systematic glitches also popped up when investors transferred money from bank accounts to stock-trading accounts, a practice that is gaining popularity among equity buyers. Customers at lenders including Bank of China and China Construction Bank were reportedly unable to conduct transfers at times last week as the systems were jammed due to the overload. What further worries investors is that there's little possibility they will get compensation for losses due to trading difficulties under the current legal framework. Brokers and banks usually describe system problems caused by a sudden surge in trading as a "force majeure," which they won't be responsible for. (For more biz stories, please visit Industries)
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