Brokerages reveal US$800m Losses

Three of China's biggest brokerages reported combined losses of more than US$800m under new accounting rules requiring companies to list stock investments in their books at market value. Haitong Securities Co., Shenyin Wanguo Securities Co. and Guotai Junan Securities Co. none of which is listed – disclosed the losses in statements filed with China's interbank market, Bloomberg reported. The report said most of the losses were booked as adjustments to previously reported earnings periods, enabling all three companies to say they were profitable in 2004. Haitong, China's biggest brokerage by net assets, had a RMB2.96bn (US$357m) accumulated loss on its balance sheet as of the end of 2004, according to the unaudited report. Shenyin Wanguo, which has a fund venture with BNP Paribas SA, recorded a RMB2.84bn loss, while Guotai Junan's was RMB986m.