The brokerage unit of Chinese financial firm Shenwan Hongyuan Group Co Ltd will stop lending money to clients to buy shares in Ping An Insurance Group, the latest move in China’s drive to tighten margin financing rules to curb stock market risks fueled by a record amount of borrowed money.
In a statement posted on its website after Friday’s market close, Shenwan Hongyuan Securities said that starting June 1 it will no longer lend money to clients who want to purchase Ping An shares with borrowed funds.
The Shenwan announcement came after several Chinese brokerages took measures to regulate the margin trading business last week.
Separately, official Xinhua News Agency reported on Monday that Qilu Securities, a medium-size domestic brokerage firm, also stopped lending their clients’ money to buy shares in Ping An.
Pin An shares dipped in early trading on Monday, falling 0.1 percent by 0230 GMT, underperforming China’s benchmark indices , which were up more than 1 percent.
(Reporting by Shanghai Newsroom and Samuel Shen; Editing by Kenneth Maxwell)
Topics Mergers & Acquisitions Agencies China
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