China test water steel cover guarantee harsh internal control or frequent announcements

Steel futures in Shanghai Futures Exchange (hereinafter referred to as "the previous period") after the listing nearly two years later, China (000717.　　SZ) on 14th at the fifth session of the Board of Trustees in 2011, the first provisional meeting to consider the adoption of the "domestic steel futures hedging business" and related futures hedging business internal control system two bills. China issued the announcement that through the last period of thread steel, wire futures market development of steel futures hedging business, the purpose is to make full use of futures market hedging function, to avoid the large price fluctuations in steel prices may bring to the company's production and operation of adverse effects, and will be strictly "　　Futures positions do not exceed the company's production of the spot supply "and" futures positions and the value of the spot to maintain the basic consistency of time "principle, do not carry out speculation and carry trade. China also disclosed that its steel hedging quantity within 250,000 tons, and in accordance with the current period of the margin required by the calculation, the proposed investment (margin) is not more than 200 million yuan. In fact, the current threaded steel, wire futures prices maintained at about 5000 yuan per ton, the last issue of the announcement in February this year, the settlement parameters show that the exchange of thread steel, wire futures of the minimum margin of 12%, 10%, and futures companies will also be required on the exchange margin ratio of 2%-3%　　, and China 200 million yuan of the annual futures hedging investment quota also includes the preparation of additional temporary security deposit. China 2009 Annual Report, the company 2009 total production of steel 4.06 million tons, of which 1.44 million tons of plate, 1.07 million tons of wire rod, 1.55 million tons of bar. Its 2010.5 annual report shows 2.4425 million tonnes of steel produced in the first half of last year, up 34.64% from 1.814 million tonnes a year earlier. It can be roughly estimated that its 2010 annual production of 1.4 million tons of wire, and yesterday its board approved 250,000 tons of hedging, the maximum value should not exceed the corresponding spot of 20%. According to the law of the industry, for the main raw materials rely on outsourcing and processing profits meager production enterprises, can be appropriate to increase the ratio of hedging, and when the main product bull market is obvious, you can reduce the proportion of selling cover.　　In fact, according to China disclosed its steel products in the first half of 2010 years gross margin is not 6.28%. It is noteworthy that the 2009 steel futures listed in the first year, the last phase of rebar futures has become the world's most active commodity futures varieties, but on the same time the listed wire futures have been no one, as of yesterday, wire total positions less than 300 hands (10 tons per hand).　　Therefore, you can expect the main production wire China, will only be associated with the market trend of the high incidence of threaded steel futures to carry out the relevant hedging. Wait and see nearly two years later decided to "Test water" steel futures hedging business China, in the decision to carefully participate, but also made the industry seems to be almost "harsh" "futures hedging business Internal control system". As stipulated in the system, "shall not use the funds raised directly or indirectly for hedging ", even promise" when the company futures hedging business has significant risks or may have significant risks, futures hedging business losses or potential losses accounted for the company in the previous year audited net assets of more than 10%, and the loss amount of more than 10 million yuan,　　The company shall issue interim announcements and disclose relevant information in a timely manner.　　If the company has enough cover, when rebar price per increase of 40 yuan/ton may be announced, and the current rebar price in 5000 yuan, that is, the price of each rise a very small margin may be more than 10 million yuan, then, whether the need for frequent announcements, or will become a problem. According to the "First financial daily" reporter know, in the steel futures market, although the domestic sand steel, ping steel, Fushun new steel and other private steel production enterprises actively participate, and achieved good hedging performance, but because these enterprises are not listed companies,　　The industry is not yet open access to these steel production enterprises to participate in steel futures hedging business data. More interestingly, China set the volume to within 20% of the spot size, and said that 10% of the money needed to invest more than the net worth would be considered through the shareholders ' meeting rather than the board. Compared with some of the listed companies ' hedging business, it is not difficult to find that these listed companies still have many flaws in the decision-making, internal control management and information disclosure of the futures hedging business.