Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
MNI (London) - China Securities Finance Corporation data through Wednesday points to a continued pullback in margin usage across Chinese equities, with margin deployment falling ~13% since the mid-December peak. As Chinese equity benchmarks ticki away from lows we point to two potential avenues that have factored into the move lower in margin in the last couple of sessions: touted restrictions surrounding various leveraged short positions leading to existing shorts cutting positions as state-backed support steps up, while levered longs may be using the bounce in benchmarks to exit positions (after margin calls seemed to contribute to the recent pull lower in Chinese equities).
- We will continue to monitor margin dynamics, particularly given regulatory focus on the area.
- A quick reminder that Chinese mainland markets are now closed until Monday 19 Feb, owing to the observance LNY holiday.
Fig. 1: China Outstanding Margin Balance (CNY 000 Mn)
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.