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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 -0.55%   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 -0.83%  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 +0.11%   /zigman2/quotes/208139708/delayed HK:6030 -4.80% , which is owned by financial giant Citic Group, and Haitong Securities /zigman2/quotes/203443667/delayed CN:600837 +0.93%   /zigman2/quotes/207313420/delayed HK:6837 -7.45%  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 +0.66%  , another listed subsidiary of Citic Group, Bank of China Ltd. /zigman2/quotes/209359942/delayed CN:601988 +1.31%   /zigman2/quotes/204682472/delayed HK:3988 -0.78% /zigman2/quotes/201568493/composite BACHY -0.49% , Industrial & Commercial Bank of China Ltd. /zigman2/quotes/202525815/delayed CN:601398 +0.46%   /zigman2/quotes/201401473/delayed HK:1398 -1.36%   /zigman2/quotes/204265987/composite IDCBF -6.88%  and Agricultural Bank of China Ltd. /zigman2/quotes/204629388/delayed CN:601288 +1.42%   /zigman2/quotes/200705246/delayed HK:1288 -0.85%   /zigman2/quotes/209398792/composite ACGBF -1.52%  all hit the 10% daily price-drop limit.

Among major insurers, China Life Insurance Co. Ltd. /zigman2/quotes/204766889/delayed CN:601628 -0.44%   /zigman2/quotes/202359856/delayed HK:2628 -2.98%   and Ping An Insurance Group Co. /zigman2/quotes/202773380/delayed CN:601318 +0.63%   /zigman2/quotes/210315058/delayed HK:2318 -4.34%   /zigman2/quotes/202212125/composite PNGAY -2.07%  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 -2.15%   (down 15%), and China Galaxy Securities Co. /zigman2/quotes/206618523/delayed HK:6881 -6.34% (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 +5.22%   and Poly Real Estate Group Co. /zigman2/quotes/201864015/delayed CN:600048 +4.17%   gave up 10%.

Among the real-estate names listed in Hong Kong, China Vanke Co. /zigman2/quotes/203851375/delayed HK:2202 +5.17%   retreated 6.3%, China Overseas Land & Investment Ltd. /zigman2/quotes/205731176/delayed HK:688 +4.89%   /zigman2/quotes/210412581/composite CAOVF +1.89%   lost 3.5%, and China Resources Land Ltd. /zigman2/quotes/202417326/delayed HK:1109 +4.21%   /zigman2/quotes/201656413/composite CRBJF -1.50%  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 +1.07%  ended up 0.9%, and the broader Topix tacked on 0.6%.

Sydney’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO -0.27%  edged up 0.2%, while Seoul’s Kospi Composite Index /zigman2/quotes/210598069/delayed KR:180721 -0.71%   settled 0.8% higher.

/zigman2/quotes/210598127/delayed
CN : China: Shanghai
3,024.39
-16.81 -0.55%
Volume: 20.41B
Sept. 30, 2022 3:00p
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/zigman2/quotes/210598030/delayed
HK : Hong Kong Exchange
17,079.51
-143.32 -0.83%
Volume: 1.36M
Oct. 3, 2022 4:08p
loading...
/zigman2/quotes/210326178/delayed
CN : China: Shanghai
¥ 17.42
+0.02 +0.11%
Volume: 41.24M
Sept. 30, 2022 3:00p
P/E Ratio
11.18
Dividend Yield
3.10%
Market Cap
¥239.63 billion
Rev. per Employee
¥3.49M
loading...
/zigman2/quotes/208139708/delayed
HK : Hong Kong
$ 12.70
-0.64 -4.80%
Volume: 5.79M
Oct. 3, 2022 4:08p
P/E Ratio
6.70
Dividend Yield
4.98%
Market Cap
$265.27 billion
Rev. per Employee
$2.80M
loading...
/zigman2/quotes/203443667/delayed
CN : China: Shanghai
¥ 8.66
+0.08 +0.93%
Volume: 22.09M
Sept. 30, 2022 3:00p
P/E Ratio
12.02
Dividend Yield
3.46%
Market Cap
¥96.42 billion
Rev. per Employee
¥3.60M
loading...
/zigman2/quotes/207313420/delayed
HK : Hong Kong
$ 3.85
-0.31 -7.45%
Volume: 54.17M
Oct. 3, 2022 4:08p
P/E Ratio
3.26
Dividend Yield
9.10%
Market Cap
$106.74 billion
Rev. per Employee
$5.21M
loading...
/zigman2/quotes/206411273/delayed
CN : China: Shanghai
¥ 4.56
+0.03 +0.66%
Volume: 16.71M
Sept. 30, 2022 3:00p
P/E Ratio
4.51
Dividend Yield
6.62%
Market Cap
¥197.22 billion
Rev. per Employee
¥6.67M
loading...
/zigman2/quotes/209359942/delayed
CN : China: Shanghai
¥ 3.09
+0.04 +1.31%
Volume: 127.96M
Sept. 30, 2022 3:00p
P/E Ratio
4.07
Dividend Yield
7.15%
Market Cap
¥845.34 billion
Rev. per Employee
¥3.26M
loading...
/zigman2/quotes/204682472/delayed
HK : Hong Kong
$ 2.55
-0.02 -0.78%
Volume: 108.10M
Oct. 3, 2022 4:08p
P/E Ratio
2.78
Dividend Yield
10.15%
Market Cap
$935.79 billion
Rev. per Employee
$3.99M
loading...
/zigman2/quotes/201568493/composite
US : U.S.: OTC
$ 8.09
-0.04 -0.49%
Volume: 173,097
Oct. 3, 2022 3:59p
P/E Ratio
2.75
Dividend Yield
8.55%
Market Cap
$119.21 billion
Rev. per Employee
$504,356
loading...
/zigman2/quotes/202525815/delayed
CN : China: Shanghai
¥ 4.35
+0.02 +0.46%
Volume: 157.86M
Sept. 30, 2022 3:00p
P/E Ratio
4.35
Dividend Yield
6.74%
Market Cap
¥1461.34 billion
Rev. per Employee
¥3.30M
loading...
/zigman2/quotes/201401473/delayed
HK : Hong Kong
$ 3.63
-0.05 -1.36%
Volume: 97.09M
Oct. 3, 2022 4:08p
P/E Ratio
3.08
Dividend Yield
9.46%
Market Cap
$1617.70 billion
Rev. per Employee
$3.85M
loading...
/zigman2/quotes/204265987/composite
US : U.S.: OTC
$ 0.47
-0.03 -6.88%
Volume: 0.00
Sept. 28, 2022 2:42p
P/E Ratio
3.00
Dividend Yield
N/A
Market Cap
$201.98 billion
Rev. per Employee
$514,332
loading...
/zigman2/quotes/204629388/delayed
CN : China: Shanghai
¥ 2.86
+0.04 +1.42%
Volume: 260.21M
Sept. 30, 2022 3:00p
P/E Ratio
4.04
Dividend Yield
7.23%
Market Cap
¥978.29 billion
Rev. per Employee
¥2.61M
loading...
/zigman2/quotes/200705246/delayed
HK : Hong Kong
$ 2.33
-0.02 -0.85%
Volume: 56.47M
Oct. 3, 2022 4:08p
P/E Ratio
2.72
Dividend Yield
10.39%
Market Cap
$1082.96 billion
Rev. per Employee
$3.25M
loading...
/zigman2/quotes/209398792/composite
US : U.S.: OTC
$ 0.30
-0.0047 -1.52%
Volume: 730.00
Oct. 3, 2022 3:46p
P/E Ratio
2.77
Dividend Yield
N/A
Market Cap
$137.96 billion
Rev. per Employee
$406,847
loading...
/zigman2/quotes/204766889/delayed
CN : China: Shanghai
¥ 31.63
-0.14 -0.44%
Volume: 11.13M
Sept. 30, 2022 3:00p
P/E Ratio
25.28
Dividend Yield
2.06%
Market Cap
¥726.27 billion
Rev. per Employee
¥8.04M
loading...
/zigman2/quotes/202359856/delayed
HK : Hong Kong
$ 9.76
-0.30 -2.98%
Volume: 20.89M
Oct. 3, 2022 4:08p
P/E Ratio
6.46
Dividend Yield
7.80%
Market Cap
$803.98 billion
Rev. per Employee
$9.72M
loading...
/zigman2/quotes/202773380/delayed
CN : China: Shanghai
¥ 41.58
+0.26 +0.63%
Volume: 33.16M
Sept. 30, 2022 3:00p
P/E Ratio
7.26
Dividend Yield
5.82%
Market Cap
¥711.24 billion
Rev. per Employee
¥3.00M
loading...
/zigman2/quotes/210315058/delayed
HK : Hong Kong
$ 37.50
-1.70 -4.34%
Volume: 37.99M
Oct. 3, 2022 4:08p
P/E Ratio
5.44
Dividend Yield
7.64%
Market Cap
$787.34 billion
Rev. per Employee
$3.84M
loading...
/zigman2/quotes/202212125/composite
US : U.S.: OTC
$ 9.71
-0.21 -2.07%
Volume: 406,347
Oct. 3, 2022 3:59p
P/E Ratio
5.49
Dividend Yield
6.72%
Market Cap
$100.30 billion
Rev. per Employee
$464,854
loading...
/zigman2/quotes/208006958/delayed
HK : Hong Kong
$ 0.46
-0.01 -2.15%
Volume: 680,000
Oct. 3, 2022 4:08p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
$725.93 million
Rev. per Employee
$1.44M
loading...
/zigman2/quotes/206618523/delayed
HK : Hong Kong
$ 3.40
-0.23 -6.34%
Volume: 185.29M
Oct. 3, 2022 4:08p
P/E Ratio
2.93
Dividend Yield
10.68%
Market Cap
$77.62 billion
Rev. per Employee
$3.12M
loading...
/zigman2/quotes/208026094/delayed
CN : China: Shanghai
¥ 11.49
+0.57 +5.22%
Volume: 73.25M
Sept. 30, 2022 3:00p
P/E Ratio
5.43
Dividend Yield
5.48%
Market Cap
¥51.87 billion
Rev. per Employee
¥1.86M
loading...
/zigman2/quotes/201864015/delayed
CN : China: Shanghai
¥ 18.00
+0.72 +4.17%
Volume: 95.92M
Sept. 30, 2022 3:00p
P/E Ratio
7.72
Dividend Yield
3.22%
Market Cap
¥215.47 billion
Rev. per Employee
¥4.83M
loading...
/zigman2/quotes/203851375/delayed
HK : Hong Kong
$ 15.04
+0.74 +5.17%
Volume: 6.53M
Oct. 3, 2022 4:08p
P/E Ratio
6.12
Dividend Yield
7.60%
Market Cap
$219.20 billion
Rev. per Employee
$4.33M
loading...
/zigman2/quotes/205731176/delayed
HK : Hong Kong
$ 21.45
+1.00 +4.89%
Volume: 33.10M
Oct. 3, 2022 4:08p
P/E Ratio
5.39
Dividend Yield
5.41%
Market Cap
$223.82 billion
Rev. per Employee
$51.24M
loading...
/zigman2/quotes/210412581/composite
US : U.S.: OTC
$ 2.70
+0.05 +1.89%
Volume: 0.00
Sept. 29, 2022 11:49a
P/E Ratio
5.29
Dividend Yield
N/A
Market Cap
$28.51 billion
Rev. per Employee
$6.57M
loading...
/zigman2/quotes/202417326/delayed
HK : Hong Kong
$ 32.20
+1.30 +4.21%
Volume: 15.37M
Oct. 3, 2022 4:08p
P/E Ratio
6.35
Dividend Yield
5.25%
Market Cap
$220.35 billion
Rev. per Employee
$5.19M
loading...
/zigman2/quotes/201656413/composite
US : U.S.: OTC
$ 3.91
-0.06 -1.50%
Volume: 0.00
Sept. 29, 2022 12:09p
P/E Ratio
6.02
Dividend Yield
N/A
Market Cap
$27.52 billion
Rev. per Employee
$665,352
loading...
/zigman2/quotes/210597971/delayed
JP : Nikkei
26,215.79
+278.58 +1.07%
Volume: 0.00
Oct. 3, 2022 3:15p
loading...
/zigman2/quotes/210598100/delayed
AU : S&P ASX
6,456.90
-17.30 -0.27%
Volume: 647,001
Oct. 3, 2022 4:54p
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/zigman2/quotes/210598069/delayed
KR : Korea Exchange
2,155.49
-15.44 -0.71%
Volume: 950,269
Sept. 30, 2022 3:32p
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Laura He is a MarketWatch reporter based in Hong Kong. Follow Laura on Twitter at: @lauraliuhe.

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