Chinas securities refinance program has entered the last phase of preparation, the China Securities Journal has reported. The pilot program will enable institutions to expand their margin trading and securities lending business.
China launched margin trading and short selling in early 2010 but the practice remained limited with most securities companies unable to provide enough money and stocks to support their clients leverage trading and short sales. Hence margin financing and securities lending is limited in the Chinese market.
The launch of the refinancing program is expected to inject more liquidity into the stock market and enlarge the margin trading and securities lending markets.
(JDC)