China to double deposit for stock margin trading

AFP, SHANGHAI: China will double the deposit required for investors to borrow funds to trade stocks -- known as margin trading -- the Shanghai stock exchange said yesterday, as authorities seek to limit a practice that created a massive market bubble. Both the Shanghai and Shenzhen stock exchanges will increase the minimum requirement for margin trading to 100 per cent from 50 per cent, the Shanghai bourse said on its official microblog. That means investors must have the same level of funds in their accounts as the amount they want to borrow. Margin trading was behind a stock market rally that sent the Shanghai index up 150 per cent in a year, before it crashed in June. The announcement of the new limits came as the Shanghai market rebounds, with the benchmark index now up 22 per cent from its recent low in August.

China to double deposit for stock margin trading

AFP, SHANGHAI: China will double the deposit required for investors to borrow funds to trade stocks -- known as margin trading -- the Shanghai stock exchange said yesterday, as authorities seek to limit a practice that created a massive market bubble. Both the Shanghai and Shenzhen stock exchanges will increase the minimum requirement for margin trading to 100 per cent from 50 per cent, the Shanghai bourse said on its official microblog. That means investors must have the same level of funds in their accounts as the amount they want to borrow. Margin trading was behind a stock market rally that sent the Shanghai index up 150 per cent in a year, before it crashed in June. The announcement of the new limits came as the Shanghai market rebounds, with the benchmark index now up 22 per cent from its recent low in August.