Head of China Research - Forsyth Barr Asia, Forsyth Barr Asia

David Millhouse

Head of China Research - Forsyth Barr Asia

Forsyth Barr Asia

Thematic (Sector/Industry)

China markets sold off last week, post news <span style='font: small/normal Arial, "BB.Proportional"; color: rgb(0, 0, 0); text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; float: none; display: inline !important; white-space: pre-wrap; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;'>China’s securities regulator plans to start a new round of checks on the margin-lending businesses of brokerages. <span style='font: small/normal Arial, "BB.Proportional"; color: rgb(0, 0, 0); text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; float: none; display: inline !important; white-space: pre-wrap; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;'>Despite the crackdown on 3 brokers earlier in the year, the outstanding balance of margin debt on the Shanghai Stock Exchange has climbed to a new record. <span style='font: small/normal Arial, "BB.Proportional"; color: rgb(0, 0, 0); text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; float: none; display: inline !important; white-space: pre-wrap; -webkit-text-size-adjust: auto; -webkit-text-stroke-width: 0px;'>We are concerned that further crackdowns on margin trading on the A-share will be required near term, in particular on umbrella trusts.

China markets sold off last week, post news China’s securities regulator plans to start a new round of checks on the margin-lending businesses of brokerages. Despite the crackdown on 3 brokers earlier in the year, the outstanding balance of margin debt on the Shanghai Stock Exchange has climbed to a new record. We are concerned that further crackdowns on margin trading on the A-share will be required near term, in particular on umbrella trusts.  

CHINA MARKET: Growing risks of regulatory intervention on leverage 

Silver Point

Thomas J. Monaco

Independent Insight Provider

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

Equity Bottom-Up

<ul>
<li>SGX FY 1H22 core results were not robust, coming in at SGD 216 mn, improving just SGD 1.0 mn (0.5%) HOH and reflected weakened revenues; </li>
<li>Derivatives revenue improved 3.4% HOH, resultant of slightly higher contract volumes, and higher rates and lower discounts. HKEX's foray into the A50 will ultimately eat away at SGX’s business; and </li>
<li>Significant strategic alternatives are needed at SGX, if it is to avoid being hollowed out by the HKEX. </li>
</ul>


SGX FY 1H22 core results were not robust, coming in at SGD 216 mn, improving just SGD 1.0 mn (0.5%) HOH and reflected weakened revenues; 
Derivatives revenue improved 3.4% HOH, resultant of slightly higher contract volumes, and higher rates and lower discounts. HKEX's foray into the A50 will ultimately eat away at SGX’s business; and 
Significant strategic alternatives are needed at SGX, if it is to avoid being hollowed out by the HKEX. 


Hong Kong

Hong Kong Exchanges & Clearing Limited owns and operates the stock exchange, futures exchange, and their related clearing houses in Hong Kong.  The Company provides the trading platforms for a range of cash and derivatives products and the facilities for processing trades.

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HKEX (388 HK)

CHINA MARKET: Growing risks of regulatory intervention on leverage

China markets sold off last week, post news China’s securities regulator plans to start a new round of checks on the margin-lending businesses of...

David Millhouse

Singapore Exchange – No Real Progress

SGX: SGX reported FY 1H22 core results were not robust. The top-line hiccup was nearly offset by better-than-expected cost control.

Thomas J. Monaco

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