Domestic banks have experience and expertise in managing investment in low-risk bonds based on their long-history in asset-management businesses. It's good for ICBC to pursue the plan.
Wu Zhiguo
It's another stimulus the government wants to adopt to invigorate the market by bolstering trading in the long term.
government market
The bonds were forecast to jump as their government backing means little risk to investors. As the country's stock markets still face policy uncertainties, these bonds provide a haven for investors.
government risk face bonds
Merging city banks can allow them to boost product innovations, tighten risk controls and explore business in bigger geographic regions.
business city risk banks explore
But considering China mainland's scandal-riddled brokerage sector, any concrete move may not come early this year before risk-management rules are finalized while only select brokerages are likely to be included at the initial stage.
rules early stage china
The declines were largely due to lack of confidence. Worries over weak corporate governance, brokers' scandals and an equity oversupply weighed on the bourses.
confidence worries equity corporate lack weak
Stiffer competition from bigger state-owned banks may have contributed to the earnings drop. Besides, costs probably rose as the bank was on track to expand out of the city.
competition city banks rose
experience good plan banks expertise bonds investment
By disposing of bad debt and restructuring itself into a joint-stock venture, ICBC posted handsome profits, which may help attract investors in its new share sale.
bad share handsome attract debt
The rules will not only protect investors' funds but also help regulators better streamline brokerages' businesses.
rules protect
The move is clearly aimed at protecting small investors. If directors fail to convene a shareholders' meeting when necessary, investors can act on their interests and help make corporate issues transparent.
meeting small fail act issues corporate interests
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