Wild swings in China stock market set to get wilder
Analysts say the surge in margin debt to all-time highs makes price fluctuations even more pronounced
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Hong Kong
THE one thing China's bulls and bears can agree on is that swings in the world's most-volatile major stock market are only going to get bigger after equity traders took on record amounts of debt.
Both Bank of America strategist David Cui, who predicts that Chinese shares will fall, and JPMorgan Chase & Co's Adrian Mowat, who has an overweight rating, say the surge in margin lending to all-time highs is amplifying price fluctuations in the US$4.9 trillion market. Volatility in the benchmark Shanghai Composite Index reached the highest level since 2009 this week after rising more than fourfold since July.
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