Hong Kong Caps IPO Margin Loans Amid Heated Retail Demand
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Hong Kong’s market regulator capped the amount of margin loans that can be used to buy shares at initial public offerings to clamp down on excessive demand from retail investors.
The Securities and Futures Commission will require retail investors to put in downpayment of at least 10% when taking out a margin loan for IPOs, according to a circular issued Thursday. That means brokers will only be able to extend margin loans of as much as 90% of the cost of subscribing to the IPO shares.