Chart of the Day: Value of Shares Bought With Borrowed Cash Nears Four-Year Low

The daily margin debt on the Chinese mainland’s stock exchanges — the value of shares bought with borrowed money — fell to its lowest point in almost four years on Thursday, showing investors’ waning confidence in the country’s beleaguered stock markets.

The balance of margin debt on the Shanghai and Shenzhen bourses fell to 770 billion yuan ($111.0 billion) on Oct. 18, dropping 50.8 billion yuan from the day before, according to data from the stock exchanges.

Chinese stock markets have had a bumpy ride this year amid escalating trade tensions with the U.S., a sliding yuan and concerns over domestic economic prospects.

The country’s gross domestic product (GDP) rose 6.5% year-on-year in the July-September period, the weakest expansion since the first quarter of 2009, when the global economy was at the nadir of the financial crisis, according to data released by the National Bureau of Statistics.

Shanghai and Shenzhen have been two of the world’s worst-performing markets in 2018, and are now down 30% and 37% respectively from their peaks in late January as of Thursday’s closing.

Top financial regulators have come out today to encourage different measures to stabilize the market, including urging local governments to provide capital support to save local listed companies from liquidity crunches.

Contact reporter Charlotte Yang (yutingyang@caixin.com)