“`html
Shipping containers and gantry cranes are visible near a fishing boat at the Yangshan Deepwater Port in Shanghai, China, on Wednesday, Dec. 6, 2023.
Bloomberg | Bloomberg | Getty Images
China’s stock market rally is facing increased regulatory scrutiny following a surge in trading activity to unprecedented levels.Officials are moving to curb speculative excess, even as many investors believe the bull run is still in its early stages.
Daily turnover across the Shanghai,Shenzhen,and Beijing stock exchanges reached successive record highs in early December 2023,according to Wind Information,a financial data service focused on China. Trading volume peaked at 3.99 trillion yuan ($556 billion) on December 6, 2023, surpassing the previous record of 3.48 trillion yuan set in October 2024.
The surge has evoked memories of past market excesses, notably the boom-and-bust cycle of 2015, according to market veterans interviewed by CNBC.
Chinese regulators have responded by tightening margin financing rules, including raising collateral requirements for new margin trades. Effective December 11, 2023, the margin requirement for credit purchases was increased to 100% from 80% across the three bourses. This means investors must now pay the full cost of shares upfront, effectively halting borrowing for new margin trades.
Worth a look