The Gamestop phenomenon has spread to Asia. Retail investors are buying stocks shorted by investment funds. Some Chinese brokerages have suspended trading in the shares of the US video game store chain. Their nervousness reflects broader fears asset bubbles are about to pop.

Margin loans are at record levels and may be nearing their limits. If stock prices tumble, a slew of retail investor defaults may follow.

Retail investors have exploited low borrowing rates to play an outsized role in boosting Asian asset prices. Japan’s Nikkei 225 stock index is up around 70 per cent from its March low. South Korea’s Kospi index has delivered a 104 per cent return. Asian blue-chips, by most measures, are trading near historic highs.

This has triggered a search for Asia’s version of Gamestop. In Malaysia, where short positions are restricted to 4 per cent of outstanding stock, shares in Top Glove jumped on Friday morning. The surgical glove maker is out of fashion with fund managers.

Initial public offerings are a more conventional outlet for retail investor exuberance. In Hong Kong, the resurgence of the tech sector has focused on China's Kuaishou Technology.

The size of margin financing — $61bn lent provisionally to retail investors seeking to share a $135m slice in the Chinese short video app maker is notable. South Korea has also seen record demand for margin loans. The extreme volatility smaller stocks poses big risks to brokerages

Seven of the 10 largest South Korean brokerages stopped margin lending this month. Surging loans put them at risk of falling below minimum capital requirements.

For smaller banking systems like Hong Kong’s, hefty margin lending can have wider implications. It may force monetary authorities to intervene in currency markets to weaken the Hong Kong dollar, which is pegged to its US counterpart.

Warning lights are flashing as speculative bets piled into stretched valuations in the region. Absent raised growth forecasts, further upside in Asian equities depends on margin loans remaining plentiful. Brokerages are increasingly reluctant. Retail investors should heed that warning.

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