Jin Rong Shi Bao·2025-11-07 09:25Core Viewpoint - Recent announcements from China Merchants Securities and Huatai Securities indicate an increase in the upper limit of their margin financing and securities lending (margin trading) business, reflecting a strong demand for credit trading in the A-share market [1][2]. Group 1: Company Actions - China Merchants Securities has raised its margin trading business limit from 150 billion to 250 billion yuan, an increase of 100 billion yuan [1]. - Huatai Securities has approved a similar increase, allowing its margin trading business limit to be up to three times its net capital, which is calculated to be approximately 286.58 billion yuan based on its net capital of 95.525 billion yuan as of September [1][2]. - Huayin Securities has raised its credit business limit twice this year, first to 6.2 billion yuan and then to 8 billion yuan [2]. Group 2: Market Trends - The total margin trading balance has surpassed historical highs, reaching 2.5 trillion yuan as of October 29, marking a significant increase from the previous high of 2.27 trillion yuan in 2015 [2]. - The average daily margin trading balance in the A-share market for the first nine months of 2025 was 194 million yuan, showing a year-on-year growth of over 30% [2]. Group 3: Financial Performance - Guotai Junan Securities reported a net interest income of 5.208 billion yuan for the year, a year-on-year increase of over 232%, attributed to increased income from margin trading and other debt investments [3]. - Dongfang Caifu reported a net interest income of 2.41 billion yuan, a 60% year-on-year increase, with a market share of 3.17%, up by 0.11 percentage points [3]. Group 4: Industry Implications - The increase in margin trading limits is expected to better meet the strong market demand for funds, potentially boosting market confidence and attracting more investors [3]. - However, analysts caution that the rapid growth of margin trading balances could increase market volatility, as leveraged funds may lead to irrational pricing and greater price fluctuations during market adjustments [3]. - To mitigate risks, companies are advised to enhance risk management practices, such as dynamically adjusting margin ratios and monitoring client collateral ratios [3]. Group 5: Competitive Strategies - In addition to increasing business limits, companies are encouraged to leverage technology and provide comprehensive financial services to optimize business processes and improve service quality, thereby attracting more margin trading clients [4].