Chinese are quick on the draw: Peking is making a lottery of its first share sale, but the punters love it. Teresa Poole reports

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The Independent Online
IT'S A lottery with a difference. For the past two days, thousands of punters in Peking have been streaming into banks to take part in the city's first public offering of shares. Only this is a share offering 'with Chinese characteristics'.

First potential investors must deposit some money in return for a lottery ticket. Then they wait for the draw and, for the lucky winners, the right to purchase some shares. Either way, though, the bank keeps the money for six months, paying interest at less than half the current inflation rate.

Business was steady at the Communications Bank in the central Dongdan shopping street yesterday afternoon.

By the door, bank officials herded people into a roped-off area designated for the share sale. A Peking company clerk dithered indecisively at the entrance for 10 minutes with a wad of money visible in his jacket pocket before taking the plunge and depositing 10,000 yuan (pounds 850).

'If I don't win the lottery, I'll lose money,' he grinned afterwards, when asked about the six-month deposit.

Another man, in his twenties, said he had also put in 10,000 yuan. In theory, this is several times' the average monthly salary; in practice there is a lot of ready cash available for times like this.

The share sale has attracted investors from around China. Bank officials at the door said people had arrived from far-flung places including Sichuan, Gansu, the northeast, and Shanghai to take part in the lottery.

'Peking people seem to be more cautious than those in the south and other places,' said the bank official.

This share sale serves the cash-strapped Peking government well. There is an insatiable appetite among the public for shares, and last year's austerity package had meant a clampdown on many new issues.

A tide of money is now pouring into the banks - and will stay there for the next six months.

Bank interest rates are just 9 per cent, compared with country-wide inflation of 20 per cent and even higher rates in the big cities.

With bank credit still tight, proceeds of the share sale can also be used to fund expansion at the listed companies.

The three-day lottery ticket sale ends today. In all, four Peking state companies are issuing shares and the lottery process has been given blanket coverage in the official media, showing queues of eager investors.

The Communications Bank was offering lottery tickets for the sale of shares in the Peking Light Bus Company which, despite having forecast a near doubling in profits this year, is by no means the hot stock.

Most popular is the Peking Department Store, which dates back to 1955 and is now selling about 100 million pounds worth of goods a year to the city's shopaholics.

Also up for sale are shares in the Beiren printing machinery company and the Peking Town and County Trade Centre.

The lottery draw will be held next Tuesday. Each deposit of 200 yuan yields a lottery ticket which, if successful, gives the holder the right to buy 500 shares in one of the companies.

Some 175 million shares will be issued, but a lot of punters will be disappointed.

This public share sale is being strictly regulated, however, after the stock market riots of 1992 in Shenzhen, the Special Economic Zone bordering Hong Kong, where would-be share buyers went on the rampage because the distribution of lottery tickets had been fixed by corrupt officials.

Bai Jingrong, the vice-director of the organisation committee in charge of share issuing, said Peking's procedure was better than Shenzhen's. Rather than buying lottery tickets and losing money if unsuccessful, this way people were simply forced to make a bank deposit.

And this time not everything is left to chance - the four companies conduct separate lotteries so punters can actually choose which company they would like to invest in.

(Photograph omitted)