Shanghai margin debt is at the lowest level since the aftermath of last year’s $5 trillion rout as traders pare bets on equities that have slid back into a bear market.
The outstanding balance of margin loans dropped to 584 billion yuan ($89 billion) on Monday, falling for a 12th day to the lowest level since Oct. 9. Investors had borrowed as much as 1.5 trillion yuan in June, the month the Shanghai Composite Index peaked, and a mass exodus of leveraged money was blamed for exacerbating the selloff that followed. Risks from margin trading and short selling are “controllable” as the average daily margin call is down 40 percent from last year, China’s securities watchdog said on Friday.
— With assistance by Shidong Zhang