(Yicai) Oct. 10 -- The Chinese mainland market has achieved a new record high for net share purchases through margin financing in a single day, exceeding the threshold of CNY100 billion (USD1.4 billion) for the first time.

Investors bought CNY406.4 billion worth of shares on Chinese stock exchanges with funds borrowed from brokerages on Oct. 8, of which CNY298.9 billion were repaid, resulting in a net purchase amount of CNY107.5 billion, according to data from Wind Information.

Margin financing is when investors borrow money from securities companies to buy shares by providing assets as collateral.

The margin debt balance of the Chinese stock market soared to CNY1.54 trillion (USD218 billion) on Oct. 8, a new high since Jan. 23, Wind data also showed. The margin debt also surged that day, up 55 percent to 11.67 percent from Sept. 23, the day before China introduced its latest stimulus package to boost the economy.

Most funds borrowed from brokerages were invested in the non-banking financial sector, electronics, computer, and power equipment industries.

In terms of companies, those logging the highest single-day net buying of shares on Oct. 8 were internet-based securities firm East Money Information, battery maker Contemporary Amperex Technology, and insurance giant Ping An Insurance Group, with CNY1.4 billion (USD200 million), CNY1.38 billion, and CNY1.1 billion, respectively, according to data from Choice.

Net purchases of non-banking financial stocks totaled CNY21.1 billion (USD3 billion) during the six trading days between Sept. 24 and Oct. 8, the highest among industries, according to Wind data. The electronics, computer, and power equipment sectors ranked second to fourth with CNY21 billion, CNY13.5 billion, and CNY10.5 billion, respectively.

However, the Chinese market experienced a significant decline yesterday. The Shanghai Composite Index [SHA: 000001] dropped 6.6 percent, while the Shanghai Stock Exchange Star 50 [SHA: 000688] slipped 2.6 percent. The Shenzhen Component Index [SHE: 399001] sank 8.2 percent, and the ChiNext Index [SHE: 399006] plunged 10.6 percent.

Executives at several Chinese brokerages believe that the retreat of the onshore stock market is a normal phenomenon. The margin trading value will possibly continue to increase as investors may take advantage of the pullback to improve their positions, the executives predicted.

Editor: Futura Costaglione