China A-Share Margin Financing Balance Falls For 11th Straight Session

China A-share margin financing and securities lending balance fell for the 11th straight trading day, the longest losing streak in 23 months, according to Jiemian News. Wind data showed that as of July 16, the total balance across Shanghai, Shenzhen and Beijing was 2.858156 trillion yuan, down 29.34 billion yuan from the previous trading day; margin financing balance was 2.837701 trillion yuan, down 28.653 billion yuan; and securities lending balance was 20.455 billion yuan, down 686.7 million yuan.

Brokers and branch managers told Jiemian News that overall risk in margin financing business remained controllable and that there was no large-scale wave of forced liquidations, despite market rumours about concentrated account blow-ups and broker-led forced selling. The article said the pullback reflected both a global deleveraging shift in equity markets and A-share investors’ short-term position rotation ahead of first-half earnings releases. Analysts cited by Jiemian News said some funds were taking profits, while financing repayment continued to exceed new margin purchases after early-July market declines.

Sector flows were uneven. Wind data showed that as of the July 16 close, media, industrial metals, precious metals and medical services saw the largest net inflows from margin financing. Choice data showed the top five stocks for net margin buying on July 16 were Chifeng Gold, Unigroup Guoxin Microelectronics, Rockchip, 3SBio and Aluminum Corp of China. Analysts also said investors should treat the decline in margin balances as a normal market adjustment rather than a direct cause of A-share weakness.