The Bank of China Tower in Central on Hong Kong Island. Photo: Google Maps

Bank of China, one of the country’s four largest banks, said it would try to negotiate with its clients, who suffered from losses in the bank’s Yuan Yao Bao – which literally means “crude oil treasure” – futures product due to the sudden drop in global oil prices last month.

The bank has reportedly told some of its clients that it will bear the losses caused by the negative global oil prices and pay the clients back 20% of their margins with the oil price prior to the crash, the Securities Times reported on Wednesday, citing several unnamed clients.

Another source said clients whose accounts had margins of more than 10 million yuan (US$1.41 million) would not be able to get their margins back, but they also don’t have to cover the losses caused by the negative global oil prices.

Victims of the incidents discussed the offer in a chat group. Some said they were going to accept it, while others insisted on getting back all their margins as they claimed the Yuan Yao Bao product had flaws.

Some members of the chat group said if some of their peers accept the offer and leave the group, it would be more difficult for those remaining to file a class action against the bank.

Their losses were recorded after the US WTI futures collapsed below US$0 a barrel on April 20, US time, for the first time because of oversupply in the markets caused by the coronavirus pandemic. Futures decreased to -US$37.63 a barrel.

The Bank of China said in a statement on Tuesday evening that people who don’t accept the offer can bring the civil dispute to court. The bank said it would respect the court’s judgment.

Read: Losses for Chinese investors in oil price futures

Sci-tech innovation board

Semiconductor Manufacturing International Corp (SMIC), a Hong Kong-listed chipmaker, said it plans to issue no more than 1.686 billion shares, or 25% of its issued shares, by listing on Shanghai’s Science and Technology Innovation Board.

SMIC said the proceeds of the share issue are intended to be used for its 12-inch SN1 project, a reserve for the company’s advanced and matured technology research and development and replenishment of working capital.

Headquartered in Shanghai, SMIC has a global manufacturing and service base. According to the official website of the company, SMIC and its controlling subsidiaries are one of the world’s leading IC foundry enterprises, and are also the most advanced, complete, largest and multinational IC manufacturing enterprise groups in mainland China, providing wafer foundry and technical services for different technology nodes ranging from 0.35 microns to 14 nanometers.

The company said it may distribute its accumulated profits prior to the completion of the share issue. After completion of the share issue, the profits will be available for distribution to all shareholders, including the holders of renminbi shares and holders of Hong Kong shares.

Company news

China National Petroleum Corporation (CNPC) saw sharp earnings declines for the first quarter this year, with revenue shrinking 14.4% to about 509.1 billion yuan, citing the global economy and plummeting international oil prices as causes.

Net losses reached 16.23 billion yuan in the first quarter of this year, compared with a profit of 10.25 billion yuan in the same period last year. The losses came after the Covid-19 outbreak significantly slashed market demand and weighed on industrial chains, Xinhua reported.

Aside from the epidemic impacts, the global oil rout was another major cause for the profit contraction of the company, with the Brent and West Texas Intermediate crude oil prices nosediving by 73.25% and 66.53% by the end of the first quarter, respectively.

The convergence of two black-swan events – the novel coronavirus epidemic and global oil price slumps – hit both the supply and demand of the oil and natural gas markets, pushing the company to trim spending this year, said Dai Houliang, the chairman of CNPC.

New China Life Insurance Co Ltd, a Hong Kong-listed insurer, said its net profit increased 37.6% year on year to 4.64 billion yuan in the first three months. Revenue reached 68.15 billion yuan in the period, up 37.5 % year on year. The premium income of New China Life grew 34.9 % to 58.25 billion yuan.

The story was written by Xu Jiangshan and Yuan Tianyi and first published at