Investor protection fund profits from the bull market

Initial statistics show the investment capital that bid on new share offerings in 2007 contributed at least 4 billion yuan to the nation's Protection Fund of Securities Investors.

According to the regulations of the top securities watchdog and the finance ministry on the interest of frozen subscription capital for share offers and convertible bond issuances, the interest of such subscription funds should be transferred in full to the designated account of China Securities Investor Protection Fund Corp. Based on different terms and interest rates, the fund got about 4059 million yuan in interest earnings in 2007. However as it usually takes more than 3 days from subscription to fund unfreeze, the actual interest returns must be higher than the estimated figure.

2007 witnessed 118 new share floats on the mainland stock market, attracting as high as 63.06 trillion yuan in cumulative subscription funds. Among them, 19 IPOs froze over 1 trillion yuan, with China Railway, PetroChina and China Pacific Insurance taking the first three places. They froze 3383,506 million, 3377,797 million, and 2830,185 million yuan in subscription funds respectively, which translated into 225.26 million, 224.88 million and 188.42 million yuan in interest incomes. Another six companies also posted interest returns of more than 100 million yuan including China Shenhua, China Shipping Container Lines, China Construction Bank, China Oilfield Services Ltd, Bank of Beijing, and Wuhan Fingu Electronic Technology.

Industry insiders believe with the return of more red chips to the mainland stock market will come more funds subscribing for new share issues, thus bringing in higher interest returns. And the protection fund of securities investors will be further replenished.