Everbright Bank IPO odds dented by trading mishaps, US regulator's probe
Investigation by US authorities into JP Morgan's hiring, trading mishaps at group's securities unit could undermine lender's listing chances
Clouds are gathering over China Everbright Bank's third attempt to list in Hong Kong amid investigations by regulators in mainland China and the United States.
Beijing has launched a probe into one of its sister firms, Everbright Securities, after a glitch in its automated trading system sparked a mini-rally in Shanghai on Friday.
In addition, US authorities are investigating the hiring activities of JP Morgan, the investment bank Everbright Bank has tapped to manage its share offering.
Compounding matters, the Shanghai-listed broker involved in the "fat finger" trading error on Friday suffered a similar glitch in the bond market yesterday.
That was after the broker had said its proprietary stock trading platform was suspended for three months, until November 18, pending the investigation by the China Securities Regulatory Commission into last week's erroneous 23.4 billion yuan (HK$30 billion) buy order.
In yesterday's incident, the brokerage gave the wrong price information when it traded 10 million yuan of government bonds. It sold the fixed-income securities at a yield of 4.2 per cent - 25 basis points higher than the previous trading day. Normally, bond yields fluctuate in a range of 5 basis points.
The brokerage said it was talking to the trade's counterparty to sort out the error.