Chinese stocks tumbled on margin trading crackdown

[Goldbug]

[Renegade777]

Did he said that and cause market crash ? Cannot find it in the short article.

[Kusje]

Did he said that and cause market crash ? Cannot find it in the short article.

 

I gave him negative 5 points for having a totally irrelevant topic.

 

 

SHANGHAI - Chinese stocks tumbled, led by brokerages, after regulators took measures to rein in margin trading at three of the nation's biggest securities firms.

 

The Shanghai Composite Index sank as much as 6 per cent to 3,175.16 at 9:36 a.m. local time. Citic Securities Co. and Haitong Securities Co., two of the brokerages targeted by regulators, slumped by the 10 per cent daily limit.

 

The penalties have raised concern that policy makers are trying to curb a surge in stock purchases using borrowed money, after outstanding margin loans jumped to 1.08 trillion yuan (S$230.92 billion) as of Jan. 13 from about 400 billion yuan at the end of June. The Shanghai Composite index has jumped 61 per cent during the past 12 months on record volumes as individual investors piled into the market.

 

The nation's top two biggest listed securities firms and Guotai Junan Securities Co. were suspended from lending money and stocks to new clients for three months, the China Securities Regulatory Commission said on its microblog on Jan. 16 after the market closed.

 

The regulator punished nine other securities companies for offenses including allowing unqualified investors to open margin finance and securities lending accounts, it said.

 

"Regulators are concerned that shares have run too hard, too fast," said Hao Hong, a strategist at Bocom International Holdings Co. in Hong Kong. "They want a measured increase in the stock market. After all, margin financing is one of the reasons for people to be bullish on brokerage stocks, and these stocks have run particularly hard."

 

The Shanghai gauge advanced 2.8 per cent last week, a 10th week of gains that's the longest winning streak since May 2007, after credit growth expanded and speculation grew the central bank will cut reserve-requirement ratios.

 

China is scheduled to release data tomorrow that's forecast to show the economy grew in the fourth quarter at the slowest quarterly pace since 2009.

 

The nation's gross domestic product growth probably slowed to 7.2 per cent in the October-to-December period, according to the median estimate of a Bloomberg survey. The economy grew 7.3 per cent a quarter earlier.

 

Economic expansion may reach 7.3 per cent this year, the Xinhua News Agency reported over the weekend, citing central bank adviser Song Guoqing.

 

The Shanghai Composite is the best performer among 93 global indexes tracked by Bloomberg over the past year with a 67 per cent gain. The index was valued at 12.6 times 12-month projected earnings last week, the highest level since April 2011, according to data compiled by Bloomberg. - See more at: http://www.straitstimes.com/news/business/markets/story/china-shares-plunge-regulators-prick-stock-market-bubble-20150119#sthash.fhpJ7rQg.dpuf

[Wt_know]

now that curb margin trading?

 

Edited January 19, 2015 by Wt_know

[Angcheek]

Xi history is kind of against comm. But now as the leader ... dont know will change or not . Understand what u thinking but i think xi is not Po XiLai

 

Anyway, in this mkt situation , they are doing what any leader will do. Too much lending too fast is dangerous... went up 67%! Especially in China if people default ... there will be huge impact to the economy considering the ripple effect.

[Goldbug]

Xi history is kind of against comm. But now as the leader ... dont know will change or not . Understand what u thinking but i think xi is not Po XiLai

 

Anyway, in this mkt situation , they are doing what any leader will do. Too much lending too fast is dangerous... went up 67%! Especially in China if people default ... there will be huge impact to the economy considering the ripple effect.

 

this kind of thing, neber give advance warning one meh?

 

I gave him negative 5 points for having a totally irrelevant topic.

 

 

you song can liao...

[Toothiewabbit]

Global currency reset on leow beh?

[Angcheek]

 

Just like Swiss ma ... they give false hope haha lagi worst. But thats how market is . One must jude when too mmuch is too mu

.

 

this kind of thing, neber give advance warning one meh?

 

 

you song can liao...

[Goldbug]

Just like Swiss ma ... they give false hope haha lagi worst. But thats how market is . One must jude when too mmuch is too mu

.

 

at this rate, the rich in China might need to go re-eductaion camp soon liao

[Karu]

You will see an exodus of the Richie riches from Tiong Land.... More hot money to flow into S'pore. Property market huat ah!!!

 

6.9 mil in no time, way ahead of schedule!!!

 

BTW, communism is only an ideology, no real communism exist including North Korea.

Edited January 19, 2015 by Karu

[Goldbug]

now down 7% liao

[Duckduck]

+40% recently which "everybody" missed, now crash a little macam apocalypose... everyone behind the curve again...

[Ktglfc]

It's just a minor correction lah ...

[Goldbug]

+40% recently which "everybody" missed, now crash a little macam apocalypose... everyone behind the curve again...

 

got government erase market wealth by imposing "punishment"?

[Kusje]

What's this news go to do with communism ?

 

Would you have come into this thread if he didn't write some sensationalist title?

[Goldbug]

down 8% liao...

[Darryn]

down 8% liao...

Hmmmm...worst stock market crash in history went like this...

 

• On October 24 ("Black Thursday"), the market lost 11 percent of its value
• On October 28, "Black Monday", more investors facing margin calls decided to get out of the market, and the slide continued with a record loss in the Dow for the day of 38.33 points, or 13%.

Once margin calls start - it can have a snowballing effect...

[Duckduck]

meanwhile KLCI +0.4%...