Margin Balance Falls for 8 Consecutive Sessions, Setting Longest Decline Record in 15 Months
N.R. Finch
Combined margin balance across Shanghai, Shenzhen and Beijing exchanges fell for eight straight sessions to ¥2.91 trillion, shedding ¥120.3 billion — the longest slide in 15 months; tech stocks led the deleveraging, but brokerages see leverage as broadly manageable.
How large is the drawdown?
As of July 13, margin balance stood at ¥2,910.2 billion, down a cumulative ¥120.3 billion over eight trading days.
The single-day drop on July 13 — ¥34.6 billion — was the steepest since February 24.
This means → leveraged money is exiting at the fastest pace in nearly five months, and the streak itself is the longest in 15 months.
Which sectors are losing margin money?
Over the past nine trading days, only five of 31 Shenwan first-tier sectors — including defence and steel — saw net margin buying. All others posted net repayment.
Electronics and telecoms, the hottest tech plays in the first half, led the net repayment list.
At the single-stock level, 370 names saw net margin outflows exceeding ¥100 million, with Cambricon, BOE and GigaDevice among the largest.
In plain terms = the AI and tech stocks that rallied hardest are now the ones shedding leverage fastest.
Why is leveraged money pulling back?
China Post Securities attributes the retreat to consecutive market declines in early July, which triggered a rapid drop in risk appetite.
Margin holders cut positions voluntarily; daily repayment has consistently exceeded new margin buying, producing the running decline.
This means → this deleveraging is voluntary risk reduction, not forced liquidation — closer to a sentiment ebb than a liquidity crisis.
Is the leverage level still manageable?
Zheshang Securities chief strategist Wang Daji sees overall A-share leverage as broadly under control, with the market still in the "risk-desensitisation phase" of the consensus rally.
In plain terms = "risk desensitisation" means markets are wobbling but most investors have not fundamentally reversed their bullish consensus — there is no evidence yet of consensus breakdown.
China Post Securities also argues that once the market stabilises, margin money is highly likely to return, leaving full-year margin-business growth intact.
Wang cautions that overseas linkages may amplify short-term volatility, but he remains bullish on A-shares over the medium term.
What are the key dates to watch next?
GF Securities notes that over the past three months, A-share electronics and telecoms indices — alongside the Philadelphia Semiconductor Index — all posted consecutive monthly gains; the recent pullback is a normal correction, with no anomalies in high-frequency industry data.
July 15 is the deadline for half-year earnings pre-announcements; the market will focus on profit delivery to test the AI supply chain's momentum.
From July 23 to 31, US tech giants including Google will report Q2 results; their earnings, forward guidance and capex signals will shape the direction and pace of the next AI rally leg.
This means → the next two weeks are "report-card time" for the AI trade — whether leverage returns depends largely on whether earnings can underpin valuations.
Content is for reference only, not financial advice.