CIMB margin account is BLR - 2%

Margin of Finance is 60%

with that example, if you put in cash rm 50,000, you can buy up to 2.5x meaning rm 125,000

60% margin meaning if the shares value drop to RM 75,000 (125k x 60%) there will be a margin call, of course you need to becareful with the counters you bought as there are capping and not full value given ( you can get the marginable counters and its capping).

If you use shares as collateral then the value will be based on the marginable list up to 1.5x

This is very cheap cost of fund and proven useful during a bullish market, however it will be a double-edged sword during market down trend

Pm for more info

This post has been edited by Remng: Mar 25 2011, 08:20 AM

is cimb blr-2 interest rate still available?

or there is cheaper option from other bank for share margin financing?

No, effective rate is 5.88 % p.a. Of course when you took 2 years as the tenure, the interest rate will be 5.88 % x 2. No compound interest and any hidden charges. How do I know, because I did took some loan to start off my share financing last year October and my repayment will be concluded in 2 months time.

I took a 10k loan, so I get 10k and every month I need to install 882.33.

Check count,

Meaning every month, I'm making a repayment of 833.33 principal + 49 interest portion = RM 882.33 installment per month

882.33 * 12 months = 10,588 (RM 10,000 principal + RM 588 interest portion).

And this is not the first time I've experience this way of financing, because this year I did advise some of my friends to cash advance from the dial a cash transfer to finance some of their business costs and capital. Tentatively, the rate is reasonable, hence I would say it is lower than personal loan (always 7-9 %). Please do not cash advance from ATM machines via credit card, as the rate is exorbitant, 18 % per annum and 5 % advance fee on the sum of withdrawal.

Interest financing is fine s long as you can finance them. So do not overlook it and always ask more of the details and do a check count before taking them. Cheers.

This post has been edited by andrewckj: Sep 20 2011, 11:39 AM

opps... if like that effective is 5.8%. Great deal!!!

is it only open for bumi?

Hi, got a dummy question on margin calculation. Assume:

Initial cash: 10,000
Finance: x2.5 or 60%
Max limit: 25,000
Margin call at: 50%

If I use up all 25,000 to buy stock A at RM1. How to calculate the share price that will trigger margin call? If possible, I need the formula.
Thanks.

Anyone know of any investment banks in Malaysia that offer margin financing for buying shares in Singapore and Hong Kong stock exchanges?

Rarely post here, and always become a silent reader.

Just want to re-confirm about this hearsay. Not sure either true or not, but I heard rumor (hearsay from friend of friend) said that for those using Maybank SMF1 account, they're able to withdraw cash some portion of their total margin. Is it true?

cheers

This post has been edited by zam4ever: Oct 19 2011, 12:54 AM

why so quiet? everybody seems to using cash to invest =)

I want to open a margin account also. Any recommendation?

First of all, you wont able to have a share margin financing because the minimum application is RM50,000.

Why not i give example in this way :
(pledge cash calculation)
Initial Cash : RM20,000
Finance : x 2.5 for CASH, x 1.5x for SHARES
Margin Limit Available : RM50,000 MAX

If u use up all RM50,000 to buy stock A at RM1, calculation as below, subject to stock A value is 100% acceptable by bank (blue chips), if some other counters might be 90%, 80%... or dont take as collateral at all.

(1) Total Utilized Amount / Total Collateral
(2) 50,000 utilized - 20000 cash / 50,000 shares value = 60.00%

in conclusion, although u pledged cash RM20,000, you fully utilized it, highly likely you will kena margin call on next day if the shares drop 1 cents.
* correct me if im wrong *



(pledge shares calculation)
Initial shares: RM34,000 ( take Maybank shares as example, bank take 100% value)
Finance : x 2.5 for CASH, x 1.5x for SHARES
Margin Limit Available : RM51,000 MAX

(1) Total Utilized Amount / Total collateral
(2) 50,000 utilized / 50,000 stock A value+ 34,000 Maybank value = 59.52%

in conclusion, you pledged ngam ngam the collateral and fully utilized, get ready to receive call/ sms next day and to top up your margin account.
* correct me if im wrong *

TQ

This post has been edited by yamatotrading: Sep 1 2013, 08:12 AM

I know necro thread, but here is my thinking.. Young people want to invest, but don't have capital to diversify enough. Stocks is all about diversification and holding long time investments..

This is where leverage capital can help you! 25k becomes 87.5k capital to invest.. this will help you diversify and minimize your risk. Add the fact you are young (early 20s to 40s), over your working life, you can easily bare this risk..

Better to invest 87.5k in your 20s than 200k when you are 50!..

That's my thinking of how leverage can help young people who lack serious capital for investments.

My strategy is to invest 200 percent of my savings (yes 200%) of my savings into stocks and start scaling back when i'm 40 (ie, 200% at 25, 200% at 32, 150% at 37, 100% at 40, 50% by 55).

By doing so, I minimize my risk by diversification AND maximize my stock gains by using time on my side..

But then you might need insurance as well. You're assuming, as a young person, that your earning capacity won't be diminished. If for instance in the future you are involved in a car crash, or something happens that makes you lose your sight, or hearing, or an arm or a leg or whatever, how are you going to continue contributing to the company?

Your risk is that something could happen to you between now and age 40 that would limit your earning potential, and thus your ability to repay the loan. To mitigate this, you will have to take out insurance. This ensures that if anything happens, your debts are still paid and you are still a going concern. This is more for reassuring the bank than anything else, they will want to know that you are still a good risk if anything happens to you

... in the unlikely scenario that you get incapacitated whilst young and able, does it really matter if you carry some debt? you are already screwd financially..

Also, the stocks you hold are used as collateral.

Obviously, you'd want to start looking at doing this once you've saved a significant amount of money ~50k ringgit.

People put downpayments on house at 10:1 ratio all the time, what the heck is 2:1 on stocks when you are at age 23 and have 40 years of working ahead of you?

This post has been edited by the99percent1: Dec 3 2014, 03:41 PM

hi, I m still noob. can enlighten me on this.

can pledge FD for SMF?

if 200k FD can get 500k trading limit?

the FD still can get interest?

if just keep the account as back up? any charges?

how the calculation for the interest?

when will kena margin call let said fully ultilised the 500k?
once the share value drop to 60% ie 300k?

usually there are multiplier. i.e. FD & Cash is 2.5-3x multiple. Shares normally have 1.5x multiple.

for example, if you pledge 100k FD, you should have 250-300k buy limit. or if you pledge 100k shares, you should have 150k buy limit. I believe you can also mix & match collateral types.

calculation of margin calls are using total outstanding divided by total equity value. for force selling, you need to check with your remisier what is the pre-agreed conditions.

from my personal trading experience, Maybank & Cimb's margin would be the most competitive. while most remisier will tell you they can match the interest rate, they don't tell you the given value of the shares (lesser given value means lesser leverage) upfront or worst, once you've bought the share, they will tell you that the share aren't marginable and request for you to pay in full or sell the shares on T4. avoid Publicbank's margin at all cost!

This post has been edited by king_majesty: Dec 23 2014, 11:34 PM

thanks for shedding some lights. but you can request for the list of marginable counters first right?

not sure about it. i usually call beforehand.

hi King,

What are the recommended investment bank for SMF ?

Thanks