China Stock Rally in Charts: Margin Debt Jumps, Shorts Squeezed
- Volumes are picking up as individual investors return
- Equity valuations are still pricey versus recent history
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Less than five months after China’s stock-market boom turned into a $5 trillion bust, the Shanghai Composite Index is on the cusp of returning to a bull market. Here are some of the key metrics of the measure’s 20 percent rally, from margin debt to valuations.
Investors are slowly rebuilding positions using borrowed money. Margin financing surged to more than 2.2 trillion yuan at the height of the stock boom, before falling by more than half in the bust. It’s now back above 1 trillion yuan, adding fuel to the rally but also raising the odds of bigger price swings.