CSFC widens margin refinancing pilot (2)

More securities firms may get permission to join in the refinancing program after China's Spring Festival holiday comes to an end on February 16, the 21st Century Business Herald reported Tuesday, citing insiders from CSFC. After the holiday as well, margin trading refinancing may move out of its current experimental stage and become a routine operation in the financial market, the report also stated.

"As the refinancing program expands, the regulators intend to facilitate margin trading as a way to bring more capital into the stock market," Zhang Xin, an analyst from Guotai Junan Securities, told the Global Times.

Demand for margin trading has grown quickly among investors recently, with the average daily added volume reaching around 1.3 billion yuan for the month of January as of Tuesday, about seven times above last year's daily average, statistics from CSFC reveal.

However, Zhang warned that risks may also be accumulating with the fast growth of margin trading.

"Securities firms should provide risk alerts to investors, otherwise their blind investing may create false prosperity," Zhang said.

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