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Chinese Stocks On The Brink: Margin Calls, Yuan At 21-Month Nadir Spark Panic
Chinese stocks came under immense pressure on Thursday, plunging nearly 3% on the one-week anniversary of the SHCOMP's worst day since February 2016.
According to reports, Thursday's losses might have been accentuated by margin calls as brokers liquidated stock pledged as collateral for loans. This isn't a new risk in China and regulators know it's a problem. Share-backed lending is rampant over there. When these things get moving in the wrong direction and corporate borrowers can't (or won't)
