China to expand margin trading, short selling programme


China will double the number of companies domestic investors can short-sell or buy using borrowed money, part of efforts to let market forces play a bigger role in pricing equities.

China has allowed investors to margin trade and short a selected list of companies since 2010, but from Jan. 31, the number of eligible tickers will almost double to 500 from 280, China's two stock exchanges announced over the weekend.

"The move can better satisfy investor demand for more trading instruments, improve the pricing mechanism of shares, promote market equilibrium and is significant to healthy and stable development of capital markets," the Shenzhen Stock Exchange said on its website.

China's CSI300 of the top Shanghai and Shenzhen A-share listings rose more than 2 percent in morning trade on Monday, driven partly by expectations that the rule changes would introduce more liquidity into the market.

Currently, 74 brokerages are allowed to conduct the business, with more than 500,000 investors having opened accounts under the scheme.

The current list is mostly limited to shares in liquid, large-cap stocks, but the expansion will include smaller-cap stocks, including those traded on China's Nasdaq-style ChiNext board.

Please read our terms of use before posting comments
TERMS OF USE: The views expressed in comments published on are those of the comment writer's alone. They do not represent the views or opinions of The Indian Express Group or its staff. Comments are automatically posted live; however, reserves the right to take it down at any time. We also reserve the right not to publish comments that are abusive, obscene, inflammatory, derogatory or defamatory.