19 Jan 2015
Shanghai Composite falls over 5% on margin account scrutiny – TradeTheNews
FXStreet (Barcelona) - The TradeTheNews Team shares that the Shanghai Composite Index fell over 6% during the midday break after CSRC suspended the new margin trading accounts of a few brokers.
Key Quotes
“Shanghai Composite entered midday break near session and 2015 lows, crashing over 6% in the wake of CSRC suspending new margin trading accounts at brokers CITIC, Haitong and Guotai Junan after market close on Friday. The measures reflect regulators' discomfort with the extent of the leverage-driven rally in equities in the final week of 2014 that coincided with the open of Shanghai-Hong Kong stock link.”
“All major mainland-listed brokerage tickers were limit down, while Hong Kong-listed shares are off by mid-teens percent.”
“The brokerage development spoiled more benign China property market data, as m/m new home price decline was the smallest in 7 months. With lower interest rates helping regenerate some housing investment demand, an economist at Barclays remarked that nationwide home prices may see the first y/y rise in 12 months in January if the positive momentum of recent weeks is maintained.”
“China will also post its latest GDP along with some December economic figures tomorrow, and analysts expect Q4 growth to confirm a miss in annual GDP target for the first time in 1998.”
“Former PBoC adviser Yu said China growth is still the highest in the world despite the slowdown, while policy advisor Song noted 2015 GDP would trend around 7.3%. A research note out of Moody's also indicated China banking system outlook is stable.”
Key Quotes
“Shanghai Composite entered midday break near session and 2015 lows, crashing over 6% in the wake of CSRC suspending new margin trading accounts at brokers CITIC, Haitong and Guotai Junan after market close on Friday. The measures reflect regulators' discomfort with the extent of the leverage-driven rally in equities in the final week of 2014 that coincided with the open of Shanghai-Hong Kong stock link.”
“All major mainland-listed brokerage tickers were limit down, while Hong Kong-listed shares are off by mid-teens percent.”
“The brokerage development spoiled more benign China property market data, as m/m new home price decline was the smallest in 7 months. With lower interest rates helping regenerate some housing investment demand, an economist at Barclays remarked that nationwide home prices may see the first y/y rise in 12 months in January if the positive momentum of recent weeks is maintained.”
“China will also post its latest GDP along with some December economic figures tomorrow, and analysts expect Q4 growth to confirm a miss in annual GDP target for the first time in 1998.”
“Former PBoC adviser Yu said China growth is still the highest in the world despite the slowdown, while policy advisor Song noted 2015 GDP would trend around 7.3%. A research note out of Moody's also indicated China banking system outlook is stable.”