Shanghai, Jan 18, 2026, 00:35 CST — Market closed
Agricultural Bank of China’s Shanghai-traded Class A shares (601288.SS) closed Friday down 1.6% at 7.21 yuan, marking roughly a 5% drop over the past three sessions. The decline comes ahead of a policy-heavy week in mainland markets. Trading volume hit about 372 million shares, with the stock dipping to a session low of 7.20 yuan. 1
China’s stock markets are closed for the weekend, shifting focus to whether regulators can rein in a surging market without causing a crash. This week, the securities watchdog promised stricter oversight as the Shanghai Composite stayed close to its highest point in ten years following a steep rally. Daily onshore trading volumes neared 4 trillion yuan. 2
The immediate focus is on leverage. Starting Monday, exchanges will raise the minimum margin requirement for new borrowings from 80% to 100%—meaning investors must put up more cash to buy shares on margin. Wang Jun, a strategist at BOC International, advised investors to “reduce their leverage levels” as volatility risks increase and the market “return[s] to fundamentals.” 3
The retreat wasn’t confined to one stock. Industrial and Commercial Bank of China’s A shares dipped roughly 0.9% on Friday, China Construction Bank dropped about 0.9%, and Bank of China slid around 0.6%. The CSI 300 index also fell 0.4%. 4
Policy is shifting in the opposite direction. China’s central bank plans to cut rates on targeted lending tools — known as structural monetary policy tools — designed to direct cheaper funding to key sectors. These changes will kick in Monday. Dong Ximiao, chief researcher at Zhaolian Finance, said the cut “directly” lowers banks’ funding costs at the central bank and should help channel cheaper credit into priority areas. 5
For Agricultural Bank, that blend is crucial. It stands at the heart of credit moving into the real economy and often trades not just on its own fundamentals but as a barometer for policy shifts.
The macro environment remains weak, continuing to weigh on policymakers. Data from China’s central bank revealed yuan loans climbed to 16.27 trillion yuan in 2025, with outstanding loans reaching 271.91 trillion yuan by the end of December—up 6.4% year on year, according to a state media report. 6
There’s a catch for bank stocks. Stricter leverage rules could slash turnover or trigger forced de-risking in crowded trades, dragging financials down even if overall policy remains supportive. Plus, leaning too heavily on cheaper lending to boost growth risks squeezing banks’ interest margins—the gap between loan earnings and deposit costs.
Monday’s reopen will test how the new margin rules and targeted rate adjustments impact risk appetite, particularly in retail-driven momentum trades. Eyes will also be on China’s 1-year Loan Prime Rate on Jan. 20, a crucial benchmark for loan pricing. DBS forecasts it will remain steady at 3.00%. 7
