Local server stocks rise on rumors of IBM bank ban

An investor at a security firm in Fuyang, Anhui province. Stocks of Chinese information technology companies jumped Wednesday on speculation that China may remove IBM Corp's servers from its banking sector. Lu Qijian / For China Daily

Domestic IT providers likely to see their adoption rate rise, analyst says

Stocks of Chinese information technology companies jumped Wednesday on speculation that China may remove IBM Corp's servers from its banking sector. Industry insiders believe local IT providers are set to be the biggest beneficiaries as the nation's cybersecurity concerns increase.

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Yonyou Software Co Ltd, the largest local enterprise software maker by market share, surged by 7.82 percent on the Shanghai Stock Exchange on Wednesday. The CSI 300 Information Technology Index also rose by 2.85 percent, hitting its highest close since May 6. The index monitors top tech companies trading on the Shanghai and Shenzhen stock exchanges.

Also jumping was Lenovo Group Ltd, the world's No 1 personal computer maker and a major server provider in China. The Hong Kong-listed company was up by 1.03 percent.

Local IT providers are most likely to see their adoption rate rise as the Chinese government tightens restrictions on products provided by overseas companies, said Gene Cao, senior analyst at Forrester Research Inc.

Industry regulators, including the People's Bank of China, the central bank, and the Ministry of Finance, are reviewing a new rule to have the nation's commercial banks stop using IBM servers because of potential security risks, Bloomberg reported, citing anonymous sources.

IBM Corp is "not aware of" any Chinese government policy to remove its servers from the banking industry, the United States company said in a statement.

China Daily contacted Chen Wenxiong, director of the technology risk management office at the China Banking Regulatory Commission to corroborate the story, but he said that he had "no idea" about any new policy and refused to comment.

"In fact, news reports now state that China's National Development and Reform Commission has not heard of any alleged directive to that effect," said IBM, adding that it has been a "trusted partner" in China for more than 30 years.

IBM's high-end servers are widely used in Chinese banks. Big Blue refused to provide its exact market share.