Chinese investors are borrowing a record amount of cash to buy local stocks, further fueling a months-long rally that has largely been driven by liquidity, reports Bloomberg. The outstanding amount of margin trades in China’s onshore equities market climbed to RMB 2.28 trillion ($320 billion) Monday, surpassing the previous record of RMB 2.27 trillion in 2015. Traders added such leveraged positions for all but three days in August.

The world’s second-biggest stock market has been rallying since April, partly reflecting optimism that China’s breakthroughs in artificial intelligence and efforts to cut overcapacity will revive growth. In the absence of potent fiscal or monetary stimulus, whether Chinese households will use some of their $23 trillion cash pile to invest is seen as key to the next leg of the bull run.

“Margin financing was likely the main source of new funds entering the stock market in August,” according to China Merchants Securities analyst Zhang Xia. Active stock funds have seen net purchases and the registered size of equity-focused hedge funds have increased significantly since July, “all indicating that residents’ funds are beginning to accelerate allocation into the stock market,” he wrote in a note.

Chinese initial public offerings have raised more than five times as much money as those in the US this year as a crop of fresh listings in the world’s biggest economy failed to appear after a dire 2022, reports the Financial Times. Rising interest rates, stubbornly high inflation and the recent turmoil in the US banking sector have dashed hopes of a recovery in companies floating on Wall Street.

European markets have also been moribund, leaving Asia—and particularly China—as the clear global leader in IPO markets this year, helped by an end to the tough pandemic restrictions and a new streamlined listings regime for the Shanghai and Shenzhen stock exchanges.

“It’s not so much that Asia has exploded, it’s just that the US and the rest of the world have died down so much that China and other markets end up accounting for a lot of activity,” said Avery Spear, an analyst at Renaissance Capital. “China has been somewhat resilient thanks to government involvement.”

Chinese liquor company ZJLD Group Inc. is seeking to raise as much as HK$6.37 billion ($812 million) through an initial public offering that is set to be Hong Kong’s largest this year, reports Bloomberg. The company is offering 490.7 million shares at HK$10.78-HK$12.98 each, according to a statement to the Hong Kong stock exchange. Its first day of trading is slated for April 27.

ZJLD’s listing could boost the city’s tepid IPO market, which has only seen about $860 million raised so far this year, according to data compiled by Bloomberg. The slow activity in the city is in line with other major fundraising venues such as New York and London, as high interest rates and volatile equities trading have kept large issuers on the sidelines.   

At the top of the price range, ZJLD’s first-time share sale is poised to be the largest in the Asian financial hub since Sunshine Insurance Group’s $859 million listing in December, according to data compiled by Bloomberg.

Shares in 10 Chinese companies soared almost 100% on average on Monday, as the first batch of initial public offerings under a new streamlined listings regime debuted in Shanghai and Shenzhen, reports the Financial Times. The top gainers among the new launches included Shenzhen CECport Technologies, an electronics distributor, whose shares ended trading up more than 220%, and Shaanxi Energy Investment, a state-owned electricity group that raised RMB 7.2 billion ($1.1 billion) from its IPO and whose stock rose about 48%. The average gain across the 10 new listings was more than 96%.

But financial experts said the massive price gains recorded by the new listings pointed to the need for more comprehensive reforms to China’s equity fundraising rules.

“The fact that you have these ridiculous jumps on Day One clearly means companies are being undersold,” said Fraser Howie, an independent analyst and expert on China’s financial system. “This is still a process where there is tremendous [state] oversight and control.”

Sinic Holdings Group will be delisted from the Hong Kong stock exchange next week, becoming the first mainland Chinese developer to face such a fate after failing to fulfil the conditions required to lift the suspension, reports the South China Morning Post.

Sinic’s listing will be cancelled from April 13, according to an announcement from bourse operator Hong Kong Exchanges and Clearing on Thursday night. Sinic missed the deadline to resume trading by March 19, as it failed to address the problem in accordance with the guidelines set by the exchange.

Trading in the shares of the company, which once was one of the top 50 developers by sales in China, had been suspended since September 20, 2021, after it failed to pay RMB 38.7 million ($5.6 million) interest on two domestic financing arrangements on September 18. The exchange’s rules stipulate that it may cancel the listing of any company that does not resume trading in its shares after 18 months of suspension.