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Jan. 19, 2015, 3:17 a.m. EST

China stocks plunge amid regulator crackdown on margins

Fresh fall in Chinese home prices also weighs on markets

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By Laura He, MarketWatch


Reuters Enlarge Image
Chinese stocks dive Monday morning, even as most other Asian markets trade higher.

HONG KONG (MarketWatch) — Chinese stocks dived the most in over six years Monday, with a wide sell-off sweeping across the financial sector as investors turned jittery over the latest move by securities regulators to clean up the margin-trading business.

The benchmark Shanghai Composite Index /zigman2/quotes/210598127/delayed CN:SHCOMP -0.20%   plunged 7.7% to close at 3,116.35, posting its biggest daily percentage decline since June 2008 . Prior to Monday’s heavy loss, the index was up 4.4% for the month to date, extending gains after finishing 2014 with a sharp 53% advance.

The plunge in mainland China helped to push Hong Kong’s benchmark Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI +1.33%  down 1.5%, with the Hang Seng China Enterprises — which tracks Hong Kong-listed mainland Chinese companies — off 5%.

The China Securities Regulatory Commission, the nation’s top market watchdog, announced Friday that a dozen brokerage firms had been punished for violations of margin-trading rules after a two-week overhaul. Infractions included allowing customers to delay margin repayments by longer than currently allowed.

The three most severely punished brokers were Citic Securities Co., Haitong Securities Co. and a unit of Guotai Junan International Holdings Ltd., which were all banned from opening new customer accounts for three months.

The A-shares of both Citic Securities /zigman2/quotes/210326178/delayed CN:600030 -0.31%   /zigman2/quotes/208139708/delayed HK:6030 +1.71% , which is owned by financial giant Citic Group, and Haitong Securities /zigman2/quotes/203443667/delayed CN:600837 +0.35%   /zigman2/quotes/207313420/delayed HK:6837 +0.73%  were suspended from trading after falling limit-down by 10%.

Other financial stocks, including banks and insurances, were also under heavy selling pressure in Shanghai.

China Citic Bank Corporation Ltd /zigman2/quotes/206411273/delayed CN:601998 -0.17%  , another listed subsidiary of Citic Group, Bank of China Ltd. /zigman2/quotes/209359942/delayed CN:601988 -0.28%   /zigman2/quotes/204682472/delayed HK:3988 +0.63% /zigman2/quotes/201568493/delayed BACHY +1.70% , Industrial & Commercial Bank of China Ltd. /zigman2/quotes/202525815/delayed CN:601398 -0.35%   /zigman2/quotes/201401473/delayed HK:1398 +0.89%   /zigman2/quotes/204265987/delayed IDCBF +1.41%  and Agricultural Bank of China Ltd. /zigman2/quotes/204629388/delayed CN:601288 -0.28%   /zigman2/quotes/200705246/delayed HK:1288 +0.31%   /zigman2/quotes/209398792/delayed ACGBF +3.48%  all hit the 10% daily price-drop limit.

Among major insurers, China Life Insurance Co. Ltd. /zigman2/quotes/204766889/delayed CN:601628 -0.12%   /zigman2/quotes/202359856/delayed HK:2628 +0.97%   /zigman2/quotes/206573290/composite LFC +2.88%  and Ping An Insurance Group Co. /zigman2/quotes/202773380/delayed CN:601318 +0.04%   /zigman2/quotes/210315058/delayed HK:2318 +0.22%   /zigman2/quotes/202212125/delayed PNGAY +2.49%  likewise saw their A-shares suspended after their price falls exceeded the daily limit.

The Chinese financial sector in Hong Kong market didn’t escape the sharp sell-off either. Major underperformers included Haitong Securities (down 16.5%), Citic Securities (down 16.5%), Shenyin Wanguo HK Ltd. /zigman2/quotes/208006958/delayed HK:218 -3.70%   (down 15%), and China Galaxy Securities Co. /zigman2/quotes/206618523/delayed HK:6881 -0.24% (down 13.2%).

Also affecting sentiment was a fresh fall in home prices across China’s major cities.

Among the Shanghai-listed shares of top mainland Chinese developers, both Gemdale Corp. /zigman2/quotes/208026094/delayed CN:600383 -1.00%   and Poly Real Estate Group Co. /zigman2/quotes/201864015/delayed CN:600048 -1.93%   gave up 10%.

Among the real-estate names listed in Hong Kong, China Vanke Co. /zigman2/quotes/203851375/delayed HK:2202 -0.33%   retreated 6.3%, China Overseas Land & Investment Ltd. /zigman2/quotes/205731176/delayed HK:688 -0.86%   /zigman2/quotes/210412581/delayed CAOVF +4.21%   lost 3.5%, and China Resources Land Ltd. /zigman2/quotes/202417326/delayed HK:1109 +0.68%   /zigman2/quotes/201656413/delayed CRBJF -2.03%  dropped 3.1%.

However, other Asian markets were boosted by a rebound in the U.S. stocks at the end of last week. Japan’s Nikkei Average /zigman2/quotes/210597971/delayed JP:NIK +0.18%  ended up 0.9%, and the broader Topix tacked on 0.6%.

Sydney’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO -0.65%  edged up 0.2%, while Seoul’s Kospi Composite Index /zigman2/quotes/210598069/delayed KR:180721 +1.37%   settled 0.8% higher.

/zigman2/quotes/210598127/delayed
CN : China: Shanghai
2,918.63
-5.79 -0.20%
Volume: 10.38B
Dec. 12, 2019 1:46p
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/zigman2/quotes/210598030/delayed
HK : Hong Kong Exchange
27,000.45
+355.02 +1.33%
Volume: 770,616
Dec. 12, 2019 1:46p
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/zigman2/quotes/210326178/delayed
CN : China: Shanghai
¥ 22.16
-0.07 -0.31%
Volume: 36.89M
Dec. 12, 2019 1:46p
P/E Ratio
21.31
Dividend Yield
1.58%
Market Cap
¥269.12 billion
Rev. per Employee
¥2.96M
loading...
/zigman2/quotes/208139708/delayed
HK : Hong Kong
HK$ 15.48
+0.26 +1.71%
Volume: 10.11M
Dec. 12, 2019 1:46p
P/E Ratio
13.06
Dividend Yield
2.57%
Market Cap
HK$182.24 billion
Rev. per Employee
HK$3.51M
loading...
/zigman2/quotes/203443667/delayed
CN : China: Shanghai
¥ 14.23
+0.05 +0.35%
Volume: 29.50M
Dec. 12, 2019 1:46p
P/E Ratio
18.17
Dividend Yield
1.05%
Market Cap
¥162.86 billion
Rev. per Employee
¥2.67M
loading...
/zigman2/quotes/207313420/delayed
HK : Hong Kong
HK$ 8.24
+0.06 +0.73%
Volume: 4.34M
Dec. 12, 2019 1:46p
P/E Ratio
9.19
Dividend Yield
2.07%
Market Cap
HK$92.93 billion
Rev. per Employee
HK$3.20M
loading...
/zigman2/quotes/206411273/delayed
CN : China: Shanghai
¥ 5.97
-0.01 -0.17%
Volume: 16.35M
Dec. 12, 2019 1:46p
P/E Ratio
6.58
Dividend Yield
3.85%
Market Cap
¥289.21 billion
Rev. per Employee
¥5.22M
loading...
/zigman2/quotes/209359942/delayed
CN : China: Shanghai
¥ 3.60
-0.01 -0.28%
Volume: 41.17M
Dec. 12, 2019 1:46p
P/E Ratio
5.69
Dividend Yield
5.11%
Market Cap
¥1062.66 billion
Rev. per Employee
¥2.61M
loading...
/zigman2/quotes/204682472/delayed
HK : Hong Kong
HK$ 3.20
+0.02 +0.63%
Volume: 100.51M
Dec. 12, 2019 1:46p
P/E Ratio
4.50
Dividend Yield
6.59%
Market Cap
HK$924.31 billion
Rev. per Employee
HK$3.13M
loading...
/zigman2/quotes/201568493/delayed
US : U.S.: OTC
$ 10.17
+0.17 +1.70%
Volume: 32,242
Dec. 11, 2019 3:55p
P/E Ratio
4.56
Dividend Yield
10.93%
Market Cap
$33.55 billion
Rev. per Employee
$399,878
loading...
/zigman2/quotes/202525815/delayed
CN : China: Shanghai
¥ 5.73
-0.02 -0.35%
Volume: 57.61M
Dec. 12, 2019 1:46p
P/E Ratio
6.59
Dividend Yield
4.37%
Market Cap
¥2031.51 billion
Rev. per Employee
¥2.53M
loading...
/zigman2/quotes/201401473/delayed
HK : Hong Kong
HK$ 5.68
+0.05 +0.89%
Volume: 86.38M
Dec. 12, 2019 1:46p
P/E Ratio
5.73
Dividend Yield
5.01%
Market Cap
HK$1988.75 billion
Rev. per Employee
HK$3.03M
loading...
/zigman2/quotes/204265987/delayed
US : U.S.: OTC
$ 0.72
+0.01 +1.41%
Volume: 24,483
Dec. 11, 2019 2:55p
P/E Ratio
5.69
Dividend Yield
N/A
Market Cap
$253.05 billion
Rev. per Employee
$387,287
loading...
/zigman2/quotes/204629388/delayed
CN : China: Shanghai
¥ 3.60
-0.01 -0.28%
Volume: 132.33M
Dec. 12, 2019 1:46p
P/E Ratio
5.95
Dividend Yield
4.83%
Market Cap
¥1263.44 billion
Rev. per Employee
¥1.80M
loading...
/zigman2/quotes/200705246/delayed
HK : Hong Kong
HK$ 3.24
+0.01 +0.31%
Volume: 66.21M
Dec. 12, 2019 1:46p
P/E Ratio
4.77
Dividend Yield
6.11%
Market Cap
HK$1119.94 billion
Rev. per Employee
HK$2.16M
loading...
/zigman2/quotes/209398792/delayed
US : U.S.: OTC
$ 0.42
+0.01 +3.48%
Volume: 1,120
Dec. 10, 2019 12:04p
P/E Ratio
4.72
Dividend Yield
N/A
Market Cap
$145.59 billion
Rev. per Employee
$276,273
loading...
/zigman2/quotes/204766889/delayed
CN : China: Shanghai
¥ 33.84
-0.04 -0.12%
Volume: 7.32M
Dec. 12, 2019 1:46p
P/E Ratio
19.43
Dividend Yield
0.47%
Market Cap
¥944.32 billion
Rev. per Employee
¥6.30M
loading...
/zigman2/quotes/202359856/delayed
HK : Hong Kong
HK$ 20.85
+0.20 +0.97%
Volume: 15.16M
Dec. 12, 2019 1:46p
P/E Ratio
10.45
Dividend Yield
0.87%
Market Cap
HK$570.95 billion
Rev. per Employee
HK$7.60M
loading...
/zigman2/quotes/206573290/composite
US : U.S.: NYSE
$ 13.22
+0.37 +2.88%
Volume: 177,570
Dec. 11, 2019 6:30p
P/E Ratio
10.39
Dividend Yield
0.64%
Market Cap
$19.12 billion
Rev. per Employee
$970,796
loading...
/zigman2/quotes/202773380/delayed
CN : China: Shanghai
¥ 84.07
+0.03 +0.04%
Volume: 26.78M
Dec. 12, 2019 1:46p
P/E Ratio
10.45
Dividend Yield
2.20%
Market Cap
¥1523.23 billion
Rev. per Employee
¥2.83M
loading...
/zigman2/quotes/210315058/delayed
HK : Hong Kong
HK$ 91.05
+0.20 +0.22%
Volume: 17.92M
Dec. 12, 2019 1:46p
P/E Ratio
9.64
Dividend Yield
2.33%
Market Cap
HK$1630.93 billion
Rev. per Employee
HK$3.35M
loading...
/zigman2/quotes/202212125/delayed
US : U.S.: OTC
$ 23.50
+0.57 +2.49%
Volume: 111,509
Dec. 11, 2019 3:58p
P/E Ratio
9.95
Dividend Yield
1.91%
Market Cap
$85.39 billion
Rev. per Employee
$427,016
loading...
/zigman2/quotes/208006958/delayed
HK : Hong Kong
HK$ 1.04
-0.04 -3.70%
Volume: 65,000
Dec. 12, 2019 1:35p
P/E Ratio
9.22
Dividend Yield
1.92%
Market Cap
HK$1.67 billion
Rev. per Employee
HK$1.58M
loading...
/zigman2/quotes/206618523/delayed
HK : Hong Kong
HK$ 4.15
-0.01 -0.24%
Volume: 4.24M
Dec. 12, 2019 1:45p
P/E Ratio
7.56
Dividend Yield
2.47%
Market Cap
HK$41.77 billion
Rev. per Employee
HK$1.14M
loading...
/zigman2/quotes/208026094/delayed
CN : China: Shanghai
¥ 12.86
-0.13 -1.00%
Volume: 12.20M
Dec. 12, 2019 1:46p
P/E Ratio
7.01
Dividend Yield
4.67%
Market Cap
¥56.79 billion
Rev. per Employee
¥7.89M
loading...
/zigman2/quotes/201864015/delayed
CN : China: Shanghai
¥ 15.28
-0.30 -1.93%
Volume: 42.67M
Dec. 12, 2019 1:46p
P/E Ratio
8.21
Dividend Yield
3.27%
Market Cap
¥184.57 billion
Rev. per Employee
¥3.42M
loading...
/zigman2/quotes/203851375/delayed
HK : Hong Kong
HK$ 29.85
-0.10 -0.33%
Volume: 3.14M
Dec. 12, 2019 1:46p
P/E Ratio
7.68
Dividend Yield
3.99%
Market Cap
HK$336.24 billion
Rev. per Employee
HK$4.54M
loading...
/zigman2/quotes/205731176/delayed
HK : Hong Kong
HK$ 28.70
-0.25 -0.86%
Volume: 7.68M
Dec. 12, 2019 1:46p
P/E Ratio
6.74
Dividend Yield
3.31%
Market Cap
HK$311.70 billion
Rev. per Employee
HK$30.79M
loading...
/zigman2/quotes/210412581/delayed
US : U.S.: OTC
$ 3.72
+0.15 +4.21%
Volume: 192,000
Dec. 11, 2019 10:28a
P/E Ratio
6.85
Dividend Yield
N/A
Market Cap
$39.11 billion
Rev. per Employee
$3.93M
loading...
/zigman2/quotes/202417326/delayed
HK : Hong Kong
HK$ 37.00
+0.25 +0.68%
Volume: 7.37M
Dec. 12, 2019 1:46p
P/E Ratio
7.94
Dividend Yield
3.39%
Market Cap
HK$256.00 billion
Rev. per Employee
HK$3.68M
loading...
/zigman2/quotes/201656413/delayed
US : U.S.: OTC
$ 4.34
-0.09 -2.03%
Volume: 0.00
Nov. 22, 2019 1:17p
P/E Ratio
7.30
Dividend Yield
N/A
Market Cap
$29.95 billion
Rev. per Employee
$470,019
loading...
/zigman2/quotes/210597971/delayed
JP : Nikkei
23,434.31
+42.45 +0.18%
Volume: 0.00
Dec. 12, 2019 2:41p
loading...
/zigman2/quotes/210598100/delayed
AU : S&P ASX
6,708.80
-43.80 -0.65%
Volume: 571,226
Dec. 12, 2019 4:39p
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/zigman2/quotes/210598069/delayed
KR : Korea Exchange
2,134.56
+28.94 +1.37%
Volume: 454,540
Dec. 12, 2019 2:41p
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Laura He is a MarketWatch reporter based in Hong Kong. Follow Laura on Twitter at: @lauraliuhe.

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