Margin Financing Balance Tops RMB 2.59 Trillion; 1,322 Stocks Over 5%
On August 4, the total margin financing balance on China's two exchanges reached RMB 2,592.314 billion, or 2.67% of A-share float market cap. Among the underlying stocks, 1,322 had financing balances exceeding 5% of their float market cap, including 99 above 10%. Fujian Cement recorded the highest ratio at 20.19%. The exchange may suspend margin buying for stocks when the monitoring indicator hits 25%.
As of August 4, the total margin financing balance on the Shanghai and Shenzhen exchanges stood at RMB 2,592.314 billion, equivalent to 2.67% of the A-share free-float market capitalization. Among the underlying stocks for margin trading, 99 had a financing balance exceeding 10% of their float market cap, 1,223 had a ratio between 5% and 10%, 2,224 between 1% and 5%, and 297 at or below 1%. In total, 1,322 stocks had a financing balance ratio above 5%.
The highest ratio was Fujian Cement, with a latest margin financing balance of RMB 4.05 billion, representing 20.19% of its float market cap. It was followed by Kaiweite and Xinkai Technology, with ratios of 18.64% and 17.90%, respectively. Other top-10 stocks included Tianma Technology, Huafang, Suzhou Tianmai, Hewang Electric, Kexiang, Meihu, and Sitaike, all with ratios above 14%. Under exchange rules, when a stock's margin financing monitoring indicator reaches 25%, the exchange may suspend margin buying on the next trading day and announce this to the market.
The average float market capitalization of the 99 stocks with ratios above 10% was RMB 4.781 billion, indicating relatively small floats. For the top 10 stocks, the average float cap was RMB 6.399 billion, with Fujian Cement having a float cap of RMB 2.007 billion. In terms of valuation, 45 of these stocks had dynamic P/E ratios above 50 times, 13 between 30 and 50 times, and 10 below 30 times. The lowest was Feinan Resources at 7.62 times, with Mulinsen and Taishan Petroleum also below 10 times.
By board, among the stocks with ratios above 10%, 42 were on the ChiNext board, 20 on the STAR Market, and 37 on the main board. By industry, they were concentrated in electronics, machinery and equipment, and power equipment, with 20, 17, and 12 stocks respectively.