CHINA: China short selling programme to be expanded

Monday February 25 2013

It is being reported that China will expand its China short-selling programme by allowing selected brokerages to borrow shares from institutional investors. The changes are slated to enter into effect on 28th February 2012.

Eleven brokerages will be able to borrow shares in a pre-approved pool of 90 publicly traded companies. The brokerages in the trial programme are: Citic Securities Co; Everbright Securities Co; GF Securities Co; Guotai Junan Securities Co; Guosen Securities Co; Haitong Securities Co; Huatai Securities Co; Shenyin & Wanguo Securities Co; China Merchants Securities Co; Galaxy Securities Co; and China Securities Co.

These firms will be allowed to borrow shares from CSFC and relend to customers. The pre-approved pool of securities comprises 50 companies listed in Shanghai and 40 in Shenzhen, with a total market capitalisation of 9.3 trillion yuan (RM4.62 trillion).

Brokerages will be able to borrow shares from CSFC for fixed periods — three, seven, 14, 28 and 182 days — at different rates.

This information will be updated as further details become available.