The latest data from the Shanghai and Shenzhen Stock Exchanges show that as of October 15, the balance of margin trading and securities lending in the Shanghai and Shenzhen stock exchanges has fallen to 795.2 billion yuan, a new low in the past four years.

reached new lows after new lows. After falling endlessly, the balance of financing and financing has returned to the low level of four years ago.

The latest data from the Shanghai and Shenzhen Stock Exchanges show that as of October 15, the balance of margin trading and securities lending in the Shanghai and Shenzhen stock exchanges has fallen to 795.2 billion yuan, a new low in the past four years. Historical data shows that the last time the two financial institutions were below 800 billion yuan was on November 25, 2014. In the following six months, the two financial institutions continued to climb, breaking through the bull market high of 2 trillion yuan on May 20, 2015.

has gone from 2 trillion to more than 790 billion yuan, and the balance of financing and financing has dropped by 60%. During the bull market in 2015, a number of star stocks were highly sought after by financing investors, such as LeTV, Palm Qu Technology, Great Wisdom, , and Retire City Jean and others have all fallen from the altar in the process of de-leveraging , or delisted, or fell into a debt crisis. As the two financial markets continue to hit new lows, there are still radicals who have entered the market to buy the bottom and have their positions liquidated.

Under the sluggish market, securities companies are currently tightening risk control on financial institutions, strictly controlling targets, and adding "emergency liquidation lines" to control the occurrence of credit risk events as much as possible. A person from the brokerage firm Liang Rong told reporters that Liang Rong has always been regarded as a weathervane for the leverage level of A shares and . After passing through the bull and bear market, the once highly sought-after GEM star stocks have also been included in the blacklist of Liang Rong. The risks of some stocks whose margin balance has reached high levels are also worthy of attention.

"One sleep" goes back to four years ago

After the National Day holiday, with the sharp decline of A-shares, the balance of financing and financing also fell all the way, from below 830 billion yuan to below 800 billion yuan.

data shows that as of October 15, the balance of margin financing on the Shanghai Stock Exchange was approximately 485.8 billion yuan, a decrease of 2.9 billion yuan from the previous trading day; the balance of margin financing on the Shenzhen Stock Exchange was 309.4 billion yuan, a decrease of 2.1 billion yuan from the previous trading day; The market totaled 795.2 billion yuan, a decrease of about 5 billion yuan from the previous trading day.

An obvious feature is that since July, the financial market has weakened with the decline of A shares. The balance of financing and financing fell from 920 billion yuan in early July to the current 795.2 billion yuan. The month-on-month declines from July to September were 3%, 3.8%, and 4% respectively. Financiers' confidence has been significantly dampened. Wind data shows that in the three months from July 16 to the present, the Shanghai and Shenzhen stock exchanges’ financing purchases were 1.32 trillion yuan, repayments were 1.42 trillion yuan, and net purchases were -102.416 billion yuan.

From the perspective of sectors, on October 11, A-shares suffered a sharp decline. Electronics, computers, non-banking and other sectors with rapid growth in post-holiday financing balances and large bases also suffered heavy losses. Data shows that the three sectors were all at the top of the list of net financing sales from October 11 to October 15, selling 2.619 billion yuan, 2.534 billion yuan and 2.285 billion yuan respectively. In terms of individual stocks during the same period, Kaile Technology , Pengxin Resources, Kaishan Shares, etc. were the top sellers, and their financing balances fell by 14.47%, 14.43%, and 12.68% respectively.

In this round of decline, major shareholders of listed companies have repeatedly experienced liquidation.

Recently, Brand New Hao announced that Zhu Yongsheng, a person acting in concert with Beijing Puhe Hengfeng, a shareholder holding more than 5% of the company's shares, received a phone call from Cinda Securities that the shares held by Brand New Hao in his two financial accounts fell below the liquidation line. After being forced to sell, Cinda Securities sold 871,800 shares through the secondary market, accounting for 0.25% of the company's total share capital.

A person from a brokerage firm and financial institutions told reporters that under the current market conditions, there are not many cases like Zhu Yongsheng. First, despite the market downturn, the probability of a limit-down of 1,000 shares is greatly reduced, and the possibility of large-scale liquidation is small; second, Brokerages are currently wary of credit risk events. In addition to shrinking the underlying assets, they have also set up an "emergency liquidation line."

The broker explained that after the last round of abnormal stock market fluctuations and the national bailout, the relevant departments had provided window guidance to brokers, requiring brokers to take buffering measures such as lowering the liquidation line and opening customer extensions. However, if there is a temporary lower limit , the risks of securities companies will increase, so many securities companies have begun to set up "emergency liquidation lines".

Previously, on September 28, Oriental Fortune Securities issued an announcement to its credit customers that from October 8, credit accounts would add an emergency liquidation line to maintain a guarantee ratio of 110%. The maintenance guarantee ratios of the warning line and liquidation line remain unchanged at 150% and 130%. When it is lower than 130%, the brokerage will not forcefully close the position and wait for the customer to cover the position. If it is lower than 110%, the position has not been covered yet. , securities firms will have the right to directly implement forced liquidation, returning the maintenance guarantee ratio to above the warning line of 150%.

Where are the star stocks of the past today?

Financing and financing has always been regarded as a benchmark for the level of A-share leverage. From 2 trillion to more than 790 billion, the balance of financing and financing has dropped by 60% so far, and the effect of deleveraging is evident.

Looking back, in the bull market of 2015, a number of star stocks that were highly sought after by financiers, such as LeTV, Zhangqu Technology, Great Wisdom, delisted Gene, etc., once doubled their stock prices in the short term based on various popular concepts, but in the After the stock market crash, these stocks became the "hardest hit areas" for both financing and financing. In the process of deleveraging, they have fallen off the altar, been delisted, or fallen into a deep debt crisis.

Take the delisted Jean as an example. From October 2014 to May 2015, due to the enthusiastic pursuit of financing customers, the company's financing balance increased by 1,227%, with the highest balance reaching 1.072 billion yuan. But also in 2015, the company failed to restructure and suffered two consecutive years of losses. In 2016, delisted Chairman Wu Shu was investigated for alleged bribery by his employer. Many loans were overdue, and losses continued. Eventually, it was delisted step by step, leaving many financiers with nothing to lose.

More financing customers suffered losses from LeTV. On October 27, 2017, the Shenzhen Stock Exchange issued a business announcement to make regular adjustments to the margin trading and securities lending targets in the third quarter. After this adjustment, LeTV was included in the blacklist of margin trading and securities lending targets. Prior to this, LeTV had been suspended, and its financing balance was still as high as 3.297 billion yuan.

The above-mentioned two financing sources told reporters that there are generally two ways to repay financing liabilities, selling bonds or repaying in cash. For stocks like LeTV that have been suspended for a long time and have been removed from the market, financing customers may only be able to repay in cash. If you do not settle in cash, you will have to pay high interest while suffering losses.

and LeTV were both included in the blacklist of the two financial institutions, as well as Zhangqu Technology, which was once the first mobile game stock on the GEM. Before the two financial targets were transferred, the company’s financing balance was 1.97 billion yuan, and its price-to-earnings ratio once exceeded 100 times. The market value is as high as 38 billion yuan. However, the latest data shows that in the past year, Palm Qu Technology has experienced a cumulative decline of more than 52%, and its market value was less than 10 billion by the closing price on October 15.

It is worth mentioning that under the current market conditions, some high-financing and risk-concentrated star stocks suddenly fell to their limit, which also frightened financing customers and became an indicator of credit risk that securities companies focused on. On October 15, iFlytek suffered a price limit due to falling into the "Rashomon enclosure". Data shows that iFlytek's current financing balance is 3.84 billion yuan, ranking 13th in the two cities' financing balance lists.