The outstanding balance of margin loans on the Shanghai and Shenzhen exchanges climbed to 4.4% of overall market capitalization on July 2 from 3.6% on June 12, before the latest rout began, Bloomberg reported. The data doesn’t include unregulated borrowing, which Bocom International Holdings Co. estimates at around US$322 billion. That would increase the debt to market cap ratio to more than 9%. Higher leverage may undermine government measures to stem the steepest three-week rout in the nation’s equities in a quarter-century. A five-fold surge in leveraged wagers had helped propel the Shanghai Composite Index index to a more than 150% gain in the 12 months through June 12.