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HSBC Thinks China Stocks Rout Is Nearly Over

  • Margin loans are at 10-month low relative to market value
  • Record selloff by leveraged traders fueled stock declines
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Stephen Roach: China Is Not Crash Landing

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Further losses by Chinese stocks are limited after leveraged traders cut $218 billion of positions, according to HSBC Holdings Plc.

The outstanding balance of margin loans on the Shanghai and Shenzhen bourses has tumbled by 60 percent to $147 billion since the June peak. Borrowed funds now account for 2.8 percent of overall market capitalization, a 10-month low and down from a record 4.5 percent earlier this year, according to data compiled by Bloomberg. The figures don’t include unofficial debt.