On July 1 Chinese regulators gave approval to a then little noticed provision that today is allowing for the repackaging of margin loans into securitized products and being sold as investments. Such is another government effort to support the Chinese stock market, but will it lead to a similar fate as that of the U.S. attempts to securitize mortgage loan products in 2008? Chinese brokerage firm selling $80 million in securitized margin loan products Huatai Securities is selling 500 million yuan ($80 million) of the country’s first asset-based securities product. Unlike U.S. asset-backed securities, famously built on real estate and…
Here We Go Again: China Packaging Stock Margin Loans As Asset Backed Securities
Mark Melin
Mark Melin is an alternative investment practitioner whose specialty is recognizing the impact of beta market environment on a technical trading strategy. A portfolio and industry consultant, wrote or edited three books including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008) and taught a course at Northwestern University's executive education program.