Head of China Research - Forsyth Barr Asia, Forsyth Barr Asia

David Millhouse

Head of China Research - Forsyth Barr Asia

Forsyth Barr Asia

Thematic (Sector/Industry)

China barred brokerages from selling third-party financing products that help clients invest in stocks using borrowed money, such as umbrella trusts and those offered by peer-to-peer websites. Seeking to rein in the use of leverage to buy stocks, the China Securities Regulatory Commission also told brokerages they may not offer margin financing and securities lending to clients with less than 500,000 yuan of assets. Investors with assets of less than 500,000 yuan who opened margin-finance and securities lending accounts before Jan. 19 will not be forced to close their positions. Brokerages may not provide margin finance and securities lending to clients with a trading history of less than six months.

China barred brokerages from selling third-party financing products that help clients invest in stocks using borrowed money, such as umbrella trusts and those offered by peer-to-peer websites. Seeking to rein in the use of leverage to buy stocks, the China Securities Regulatory Commission also told brokerages they may not offer margin financing and securities lending to clients with less than 500,000 yuan of assets. Investors with assets of less than 500,000 yuan who opened margin-finance and securities lending accounts before Jan. 19 will not be forced to close their positions. Brokerages may not provide margin finance and securities lending to clients with a trading history of less than six months. 

CHINA MARKET: China barred brokerages from selling third-party financing products

China markets sold off last week, post news <span style='font: small/normal Arial, "BB.Proportional"; color: rgb(0, 0, 0); text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; float: none; display: inline !important; white-space: pre-wrap; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;'>China’s securities regulator plans to start a new round of checks on the margin-lending businesses of brokerages. <span style='font: small/normal Arial, "BB.Proportional"; color: rgb(0, 0, 0); text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; float: none; display: inline !important; white-space: pre-wrap; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;'>Despite the crackdown on 3 brokers earlier in the year, the outstanding balance of margin debt on the Shanghai Stock Exchange has climbed to a new record. <span style='font: small/normal Arial, "BB.Proportional"; color: rgb(0, 0, 0); text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; float: none; display: inline !important; white-space: pre-wrap; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;'>We are concerned that further crackdowns on margin trading on the A-share will be required near term, in particular on umbrella trusts.

China markets sold off last week, post news China’s securities regulator plans to start a new round of checks on the margin-lending businesses of brokerages. Despite the crackdown on 3 brokers earlier in the year, the outstanding balance of margin debt on the Shanghai Stock Exchange has climbed to a new record. We are concerned that further crackdowns on margin trading on the A-share will be required near term, in particular on umbrella trusts.  

CHINA MARKET: Growing risks of regulatory intervention on leverage 

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Bank of East Asia (23 HK)

CHINA MARKET: China barred brokerages from selling third-party financing products

China barred brokerages from selling third-party financing products that help clients invest in stocks using borrowed money, such as umbrella...

David Millhouse

CHINA MARKET: Growing risks of regulatory intervention on leverage

China markets sold off last week, post news China’s securities regulator plans to start a new round of checks on the margin-lending businesses of...

David Millhouse

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)