Leveraged China equity positions saw their biggest daily increase in over three years on Monday as new rules took effect that lower the deposit ratio for high-risk trades including short sales.
The increase pushed the total outstanding amount of margin debt to 1.5 trillion yuan (US$205 billion or RM962.32 billion). That’s still more than a third below the peak in 2015, when easy access to leverage fuelled a stock market bubble before officials moved to contain it.
The latest regulations on borrowing for trading came in a package of policies late last month aimed at reinvigorating stagnating capital markets and boosting investors’ confidence. In enacting the changes, which also included a stamp duty cut, regulators said investors have become more rational in recent years and risk-awareness has increased, while the amount of leverage is stable. – Bloomberg
