Chinese stock regulators slap record $870 million fine in share-price manipulation scandal

Xiamen Beibadao Group made a 945 million yuan ($150 million) profit by using 300 trading accounts to manipulate share prices of two banks and an aluminum maker, the China Securities Regulatory Commission, above, said. (AP)
Updated 14 March 2018
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Chinese stock regulators slap record $870 million fine in share-price manipulation scandal

BEIJING: China’s securities regulator said Wednesday it fined a company a record 5.5 billion yuan ($870 million) for manipulating share prices in the latest scandal to roil the country’s turbulent markets.
Xiamen Beibadao Group made a 945 million yuan ($150 million) profit by using 300 trading accounts to manipulate share prices of two banks and an aluminum maker, the China Securities Regulatory Commission said. It gave no details of possible criminal charges against employees. Phone calls to the CSRC weren’t answered.
China’s securities industry has been battered by scandals since a 2015 stock market crash that prompted a multibillion-dollar government intervention to prop up prices.
A prominent trader was sentenced last year to 5½ years in prison for share-price manipulation and the general manager of the country’s biggest brokerage was arrested in 2016. Other brokerages disclosed they were under investigation.
Beibadao Group is China’s largest privately-owned operator of railway cargo cars, according to news reports.
Its traders took advantage of a reduction in the number of shares available for trading following the 2015 crash due to government-ordered buying by big investors, according to business news website Tencent Finance. It said that allowed Beibadao to boost prices while buying fewer shares.
The government announced plans Tuesday to combine China’s banking and insurance regulators in an effort to improve supervision of those industries amid a campaign by the ruling Communist Party to control financial risks and surging debt levels. There was no mention of possible changes to the CSRC, the third financial regulator.


Oil jumps as market tightens, more gains seen

Updated 24 September 2018
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Oil jumps as market tightens, more gains seen

  • Brent crude hit its highest since May at $80.47 per barrel
  • Commodity traders Trafigura and Mercuria said that Brent could rise to $90 per barrel by Christmas

LONDON: Oil prices rose 2 percent on Monday as US sanctions restricted Iranian crude exports, tightening global supply, with some traders forecasting a spike in crude to as much as $100 per barrel.
Brent crude hit its highest since May at $80.47 per barrel, up $1.63 or more than 2 percent, before easing back slightly to around $80.40 by 0730 GMT. US light crude was $1.18 higher at $71.96.
US commercial crude oil inventories are at their lowest since early 2015 and although US oil production is near a record high of 11 million barrels per day (bpd), subdued US drilling activity points toward a slowdown in output.
Commodity traders Trafigura and Mercuria said on Monday that Brent could rise to $90 per barrel by Christmas and pass $100 in early 2019, as markets tighten once US sanctions against Iran are fully implemented from November.
J.P. Morgan says US sanctions on Iran could lead to a loss of 1.5 million bpd, while Mercuria warned that as much as 2 million bpd could be knocked out of the market.
The Organization of the Petroleum Exporting Countries as well as top producer Russia are discussing raising output to counter falling supply from Iran, although no decision has been made public yet.
OPEC leader Saudi Arabia and its biggest oil-producer ally outside the group, Russia, on Sunday ruled out any immediate extra increase in output, effectively rebuffing a call by US President Donald Trump for action to cool the market.
“I do not influence prices,” Saudi Energy Minister Khalid Al-Falih told reporters as OPEC and non-OPEC energy ministers gathered in Algiers for a meeting that ended with no formal recommendation for any additional supply boost.
A source familiar with OPEC discussions told Reuters on Friday that OPEC and other producers have been discussing the possibility of raising output by 500,000 bpd.
“We expect that those OPEC countries with available spare capacity, led by Saudi Arabia, will increase output but not completely offset the drop in Iranian barrels,” said Edward Bell, commodity analyst at Emirates NBD bank.
JP Morgan said in its latest market outlook, published on Friday, that “a spike to $90 per barrel is likely” for oil prices in the coming months due to the Iran sanctions.
Struggling with high crude prices and a weak rupee, Indian refiners are preparing to cut back crude imports.