Strong Bullish Sentiment in A-share Market: Margin Balance Soars

There is a strong bullish sentiment among funds, and the margin balance in the A-share market has been rising steadily.

According to Wind, on February 26th, the margin balance in the A-share market reached 1.903165 trillion yuan. This is the first time since July 3rd, 2015, that the margin balance in the A-share market has exceeded 1.9 trillion yuan again. The data also shows that since February, the net margin purchase amount has been 138.628 billion yuan. Historically, there have only been 13 times when the monthly net margin purchase amount exceeded 100 billion yuan.

What are the margin traders buying? Statistics show that whether from the perspective of sectors or individual stocks, the TMT (Telecom, Media, and Technology) sector is very popular. Among them, the stocks with the highest net margin purchase amounts include TopVdn Technologies Co., Ltd., Enlight Media Co., Ltd., Hygon Information Technology Co., Ltd., UCloud Technology Co., Ltd., and China United Network Communications Group Co., Ltd., etc.

Monthly net margin purchase amount exceeds 100 billion yuan

Since the Spring Festival, leveraged funds have been accelerating their entry into the market. According to Wind data, since February 5th, the margin trading balance in the A-share market has been continuously rising. By February 26th, it had reached 1.914851 trillion yuan, which is mainly contributed by the growth of the margin balance.

Statistics show that since February 5th, the daily scale of the short - selling balance has been below 12 billion yuan, accounting for a stable 0.01% of the A - share floating market value. The margin balance was 1.784381 trillion yuan on February 5th and climbed to 1.903165 trillion yuan by February 26th. From a historical perspective, the last time the margin balance exceeded 1.9 trillion yuan was on July 3rd, 2015.

On a daily basis, the scale of the margin balance began to increase after September 24th, 2024. It declined in January 2025 but started to "counter - attack" after the Spring Festival in 2025. By February 26th, it reached a new high in the past decade.

Looking at it monthly, in February 2025, the margin balance was 1.903165 trillion yuan, and the net margin purchase amount was 138.628 billion yuan. In the past three years, the largest monthly net purchase amount was in October 2024, reaching 268.403 billion yuan. The second was in February 2025, and the third was in November 2024, with a net margin purchase amount of 134.801 billion yuan in that month.

What's more noteworthy is that historically, there have only been 13 times when the monthly net margin purchase amount exceeded 100 billion yuan. Among them, 6 times occurred in 2015. From 2024 to now, there have been 3 times, namely October and November 2024, and February 2025.

In addition, since February, the proportion of margin purchase amount to the A - share trading volume has been kept at a high level. On January 27th, 2025, the proportion of margin purchase amount to the A - share trading volume was 8.46%. After the Spring Festival holiday, this proportion rose to 10.09%. Since then, it has been kept above 9%, and there were 10 trading days when it was above 10%.

What are the margin traders buying?

Generally speaking, a high margin balance indicates a strong bullish sentiment among funds. Recently, the trading activity in the A - share market has remained at a high level. Since February, the average daily trading volume in the whole market has been about 1.8 trillion yuan, a year - on - year increase of 98.9% and a month - on - month increase of 51.28%. What are the margin traders buying?

Statistics show that according to the Shenwan secondary industry classification, since February, the industries with the highest margin balance, that is, where leveraged funds are more concentrated, are electronics, non - bank finance, computer, power equipment, and biomedicine, with the margin balance all exceeding 100 billion yuan. Followed by them are machinery and equipment, automobiles, basic chemicals, non - ferrous metals, and communications.

If we look at the net purchase amount, the industries with the highest net purchase amounts are electronics, computer, machinery and equipment, communications, power equipment, media, automobiles, biomedicine, household appliances, and basic chemicals. It can be seen that non - bank finance and non - ferrous metals are not among them.

From the perspective of individual stocks, the top ten stocks with the highest margin balance include: Orient Fortune Information Co., Ltd., Ping An Insurance (Group) Company of China, Ltd., Kweichow Moutai Co., Ltd., Citic Securities Company Limited, China Yangtze Power Co., Ltd., ZTE Corporation, BYD Company Limited, Semiconductor Manufacturing International Corporation, Zhongji Innolight Co., Ltd., and BOE Technology Group Co., Ltd. These are often popular stocks with good liquidity and large trading volumes. Compared with the list in mid - November 2024, there is not much change, only Zhongji Innolight Co., Ltd. has been added.

But from the perspective of net purchase, since February, the top 10 stocks with the highest net margin purchase amounts are: TopVdn Technologies Co., Ltd., Enlight Media Co., Ltd., Hygon Information Technology Co., Ltd., UCloud Technology Co., Ltd., China United Network Communications Group Co., Ltd., Semiconductor Manufacturing International Corporation, Will Semiconductor Co., Ltd., Zhongji Innolight Co., Ltd., Sanhua Intelligent Control Co., Ltd., and Digital China Group Co., Ltd. It can be seen that there are more stocks from the semiconductor and communication equipment sectors.

Among these 10 stocks, except for Zhongji Innolight Co., Ltd., the other 9 stocks all rose in February. Among them, the cumulative increase of TopVdn Technologies Co., Ltd., Enlight Media Co., Ltd., and UCloud Technology Co., Ltd. exceeded 100%.

What's the future of the TMT sector?

"A high margin balance often has the effect of boosting or suppressing the market, but it is also necessary to comprehensively analyze other factors such as market policies, macro - economic conditions, turnover rate, and fund flow," a report on February 25th reminded.

Actually, it is not difficult to see from the sectors and individual stocks favored by margin traders that the current market sentiment is mainly driven by the TMT sector. How to view the future market? After sorting out the recent views of institutions, it is found that the computing power sector and AI applications are still favored.

For example, some analysts believe that the key technological breakthroughs centered on artificial intelligence are bringing a new wave of industrial innovation. "Artificial intelligence " has become the most important investment theme in the A - share market at present. Through in - depth comparative reviews of two market trends, it is believed that artificial intelligence has now entered the prosperity verification stage (similar to the beginning of 2013) and is expected to become the long - term main theme of the market. The future market may shift "from hardware to software" and spread from leading stocks. Attention should be paid to the explosive growth in the terminal and application fields.

Some other analysts also mentioned that looking back at the A - share mobile Internet wave from 2010 to 2015, investment opportunities in hardware equipment came first in the initial stage, and the content and application ends blossomed in the acceleration stage. The emergence of ChatGPT at the end of 2022 may be the first year of AI applications. From 2023 to 2024, global giants increased their investment in computing power construction, and the computing power hardware stocks in the A - share market have soared. The DeepSeek boom represents that AI applications have entered the 1 - to - 100 acceleration stage. China may have more advantages in the application stage. Attention should be paid to cloud service providers and AI applications, and there is still certainty in computing power in the medium term.

Some institutions have also given warnings about the current market situation. They mentioned that reviewing the corrections in previous major TMT market trends, they generally occur in two situations: First, another industry becomes the new main theme of the market, replacing the popularity of the TMT industry; Second, the overall market corrects rapidly, driving the market down.

They also pointed out that from the performance of various industries after the market trading heat reached a high level in the past, the momentum effect is often strong in the short term. At the current time, there is no sign that other industries have the potential to challenge the popularity of the TMT industry. At the same time, before the overall market correction occurred in the past, there was often a spread of industries and a catch - up rise in cyclical industries, and then the overall market correction began. Therefore, at the current time, we can first observe the spread of the market before making a decision.