BofA: Get Ready for 'Relentless Selling' Pressure in Chinese Stocks
China's equities are more levered than you think.
One-hundred-yuan bank notes are arranged for a photograph in Beijing.
Photographer: Nelson Ching/BloombergThis article is for subscribers only.
The Chinese authorities' quest to tame the sell-off in the Shanghai Composite seen since mid-June took a major hit on Monday, with the index suffering its largest daily loss since 2007.
Waves of new investors buying on margin had paved the way for a meteoric rise in Chinese equities, which closed up almost 60 percent year-to-date on June 12. However, the flip side—the winding down of margin positions as stocks decline—has accentuated the trauma in Chinese markets.