CHINESE equities plunged the most in six years yesterday, led by brokerages, after regulatory efforts to rein in record margin lending sparked concern that speculative traders will pull back from the world’s best-performing stock market.

    The Shanghai Composite Index sank 7.7 percent to 3,116.35 at the close, its steepest drop since June 2008.

    CITIC Securities, Haitong Securities and Guotai Junan Securities Co. were suspended from lending money and stocks to new clients for three months, the China Securities Regulatory Commission (CSRC) said Friday after the market closed.

    The regulator punished nine other brokerages for offenses including allowing unqualified investors to open margin finance and securities lending accounts. On the same day, the CSRC banned banks from lending to companies that borrow to invest in equities, bonds, futures and derivatives.

    The penalties have raised concern that policymakers are trying to curb a surge in stock purchases using borrowed money, after outstanding margin loans surged to 1.08 trillion yuan (US$174 billion) as of Jan. 13 from about 400 billion yuan at the end of June.

    The Shanghai Composite index jumped 67 percent in the past 12 months through last week on record volumes as individual investors piled into the market.

    In a margin trade, investors use their own money for just a portion of their stock purchase, borrowing the rest from a broker. The loans are backed by the investors’ equity holdings, meaning that they may be forced to sell when prices fall to repay their debt.

    (SD-Agencies)

    (Related story on P10)

    The starting price for each licence plate at auctions would be 10,000 yuan.

    Car owners and companies that want to renew a car need to apply for the chance to do so within six months after completing their transfer or cancellation registration.

    A survey conducted by www.sznews.com yesterday showed that 53 percent of 2,520 respondents thought the 100,000 licence plate quota is too limited and 63.69 percent support the rule that allows owners with two cars to receive one chance to renew their licence plates. Nearly half of respondents thought the 20,000 license plate quota for electric cars is too high.

    Residents can send their feedback to szxqctk@163.com by Jan. 21.