Asian exchanges bolster lendable securities lists 06 December 2016Shanghai Reporter: Drew Nicol
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The Shanghai Stock Exchange, in concert with the Shenzhen Stock Exchange, has significantly increased the number of underlying stocks available for securities lending, while also loosening the reins on margin trading rules.
Seventy-seven new underlying stocks will be opened up to lending, as of 12 December, bringing the total number across the two exchanges to 950.
On the Shanghai Stock Exchange, the number of available stock will go from 485 to 525, while the Shenzhen Stock Exchange list will expand from 388 to 425 stocks.
According to the two exchanges, the chosen stocks have a low price/earning ratio, a large circulation market value, are active in trading, and boast stable market performance.
At the same time, margin trading rules will be amended so that the requirement for the conversion rate of stocks with static price/earning ratio of more than 300-fold, or stocks with negative static price/earning ratio, will be zero.
Both exchanges will establish a regular assessment adjustment mechanism for underlying securities, conducting two-way adjustment to the underlying securities at the end of every quarter.
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