Meanwhile, daily trade volume of yuan-forex swaps soared more than 11 times to reach $1.29 billion.
China will soon allow the trading of currency swaps at the interbank market, covering swaps between yuan and five foreign currencies, including the U.S. dollar, euro, Japanese yen, Hong Kong dollar and English pound, according to the central bank.
Developing Trust
Commercial bank investing in trust companies is a common practice in the international market. In China, this kind of investing is just getting under way.
China's first bank-invested trust company was officially set up in Wuhan, capital of central China's Hubei Province, on October 28.
The new trust company is co-invested in by the Bank of Communications (BOCOM), China's fifth largest lender, and the Hubei provincial finance department, which hold 85 percent and 15 percent of the total shares respectively.
The BOCOM invested 1.2 billion yuan to buy the shares of the Hubei International Trust and Investment Co., the first case of commercial bank investing in a trust company approved by the China Banking Regulatory Commission (CBRC).
Jin Dajian, chairman of the new company named "jiaoyin-guoxin," or BOCOM-International Trust, said the company will work to provide "professional wealth management."
Jin called the establishment of the new trust company "a breakthrough for China's trust industry," due to the fact that the country's law on commercial banks, effective since 1995, had not allowed commercial banks to invest in trust companies.
The regulation was not lifted until the end of last year, when the CBRC began to encourage financial institutions, including commercial banks, to acquire trust companies.
Quarterly Reports of Listed Companies in the A-Share Market (Iron and steel industry)
Baosteel (Shanghai, 600019): The third quarter report of Baoshan Iron and Steel Co. Ltd., China's largest steel producer, showed that the company suffered a 49.68-percent drop in net profits year on year. The net profits of Baosteel stood at 2.39 billion yuan, and the earnings per share (EPS) were 0.14 yuan.
In the first nine months, the steel giant's net profits totaled 10.55 billion yuan, sending the EPS of the first three quarters to a record 0.6 yuan.
Baosteel attributed the loss of profit to the stumbling stainless steel business. The high nickel cost dragged down the company's profit, which fell 2.1 billion yuan in the third quarter from the second.
Baosteel's share price dropped sharply after the news was published and closed at 18.51 yuan on October 31 from a peak 22.12 yuan on October 16.
TG Stainless Steel (Shenzhen, 000825): China's second largest steel company by revenue, Shanxi Taigang Stainless Steel Co. Ltd. revealed a profit increase of 161 percent in the third quarter with an EPS in the first three quarters reaching 1.04 yuan.
However, observers say the substantial profit increase was a result of huge capital injection. The total assets of TG Stainless Steel surged to 53.8 billion yuan, up 52 percent year on year.
Its share price closed at 28.07 yuan on October 31.
Masteel (Shanghai, 600808): Maanshan Iron & Steel Co. Ltd.'s net profit dropped 5.5 percent year on year in the third quarter this year to 1.576 billion yuan. However, its sales revenue increased 33.04 percent. The EPS was 0.24 yuan in the first three quarters.
The strange upside-down of net profit and sales revenue might indicate that the company's ability to make money has decreased, according to analysts.
Numbers of the Week
4.3 million
The number of China's registered small and medium-sized enterprises (SMEs) has exceeded 4.3 million and these SMEs contribute to 58.5 percent of the gross domestic product, statistics from the China International Cooperation Association of Small and Medium Enterprises show. More than 95 percent of these SMEs are privately owned.
88.7 billion yuan
China's rural population shrank to 56 percent of the national total at the end of 2006, down 8 percentage points from what it stood at in 2001, the National Bureau of Statistics reported. China recorded a total population of 1.3 billion and the rural population has been shrinking each year due to the country's urbanization efforts.
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