SHENZHEN-BASED J and A Securities says the city government intends to buy into the firm, as it seeks to enlarge its capital base to support its swelling operations. The intention is matched by the government's recent calls to build up home-grown brokerages to revive the struggling stock market. J and A Securities managing director Zhang Guoqing confirmed the city government intended to take up shares in the firm, but did not elaborate. Whether the intention would translate into action remained to be seen, because the Shenzhen government had yet to make an announcement. Mr Zhang said the firm had applied to the People's Bank of China (PBOC), the country's central bank, to enlarge its share capital from 100 million yuan (about HK$92.9 million) to a massive 1.2 billion yuan to support its rapidly growing business. 'The small capital base of the company has meant it could no longer support the risks it is taking,' he said. J and A has a share capital of 100 million yuan, but total assets have ballooned to eight billion yuan since being it set up in late 1992. 'With the existing capital and assets ratio, we don't have the adequate capital to support our lending and financing,' Mr Zhang said. 'This has been putting pressure on our production costs, as we have to lend from banks to ensure the smooth running of our business.' Mr Zhang said with a stronger capital base, J and A could further enlarge its scope of operations and expand its market coverage. 'Capital expansion will allow a brokerage to cope with bigger share issues.' The brokerage hoped to receive an approval from the PBOC on the capital expansion this year. With the PBOC approval, Mr Zhang said J and A would either invite new shareholders to join the company or existing shareholders would be asked to increase their investment. Guangdong-based Heneng Property Development Co is the brokerage's major shareholder, owning 50 per cent of the company. China Venturetech Investment Corp, backed by the Ministry of Finance and the State Science and Technology Commission, holds 20 per cent. An investment subsidiary of the Agricultural Bank of China, Shenzhen branch, has 15 per cent holding, the Shenzhen branch of Citic Industrial Bank has 10 per cent, and a food supplies firm, five per cent. J and A has gained a reputation for its aggressive expansion drive. In the 21/2 years since it was formed, it has grown from only two operations in China to 20, with a workforce of more than 1,000. Securities trading and underwriting are the mainstays of its business and Shanghai has become its focus of operations. Analysts attributed the slow growth of Shenzhen's securities market to the apparent lack of central government support for its securities firms, compared with Shanghai.