China Margin Debt Gets Unwound as Stock Selloff Deepens
- Outstanding margin trades in mainland fell by 2% on Friday
- There’s risk of negative feedback loop if stocks fall: Haitong
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China stock traders are unwinding their margin debt rapidly, underscoring how a prolonged selloff may be leading to some forced share liquidation.
The outstanding amount of margin debt balance in mainland bourses fell by 2% on Friday to 1.46 trillion yuan ($203 billion), its biggest decline since June 2018. That reverses the upward trajectory of margin trades that started in August when policies to boost markets were introduced.