SHANGHAI, June 8 (Reuters) - Major Chinese brokerage Guotai Junan Securities has restricted margin trading in 21 stocks, the official Shanghai Securities News reported on its website on Monday, citing a statement from the brokerage.
The report said the brokerage cited rising risk due to high prices of the shares in question, among other issues, and it follows similar statements by other brokerages in recent weeks,
On Friday, top brokerage CITIC Securities tighten margin trading rules for the second time in less than a month, offering fresh signs that a government-directed campaign to reduce leverage in China’s red-hot stock market is accelerating.
The news follows a statement by the China Securities Regulatory Commission on Friday that it would further tighten up regulation of the use of margin finance for stock purchases.
Chinese stock markets have been on a major rally since late 2014, with analysts cautioning that valuations have become unhinged from reality, in part thanks to heavy usage of leveraged margin finance for trade. (Reporting by Pete Sweeney; Editing by Kazunori Takada)