Some China brokerages tighten margin financing requirements: Shanghai Sec News

[SHANGHAI] Several Chinese brokerages, including CITIC Securities Co Ltd, Haitong Securities Co Ltd and Huatai Securities Co Ltd have tightened requirements for margin financing this month in a bid to control risks, the Shanghai Securities News reported on Tuesday.

The move could slow the pace of money inflows and may have a some short-term impact on stock market liquidity, the newspaper said.

The brokerages, which also include Debon Securities, have shortened the list of stocks that can be used as collateral against borrowing, and also increased deposit requirements, the newspaper said.

China's stock market has surged some 80 per cent since November, fueled in large part by leveraged share purchases.

The outstanding value of margin financing - the amount of money investors have borrowed to buy stocks - has risen to over 1.8 trillion yuan (S$387.4 billion) and repeatedly smashed records in recent sessions.

REUTERS