Chart Book

Chart of the day: China’s debt-fuelled rally

PUBLISHED : Sunday, 15 October, 2017, 10:20pm
UPDATED : Sunday, 15 October, 2017, 10:20pm

Chinese traders are increasingly buying stocks with money borrowed from brokerages, driving the outstanding balance of leveraged buying up to close to the one trillion yuan (US$151.8 billion) mark. As at Thursday, the balance of margin debts on the Shanghai and Shenzhen stock exchanges stood at a combined 990.1 billion yuan as the benchmark Shanghai Composite Index rose to its highest level since December 2015. However, the amount is still 56 per cent lower than its peak in June 2015. China’s margin debts first exceeded one trillion yuan in December 2014 and the Shanghai index surged more than 60 per cent in the following six months.