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 Share Margin Financing, borrow to play share

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officeBoy
post Feb 16 2016, 11:24 PM

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hi King,

What are the recommended investment bank for SMF ?

Thanks

QUOTE(king_majesty @ Dec 23 2014, 11:28 PM)
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!
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officeBoy
post Feb 22 2016, 10:49 PM

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I should really read your advice first, i have signed up the public bank, the cap limit is superb low, they can't expect i buy blue chip all the while ..i miss out the buying oppty due to this vmad.gif

could you share further on CIMB cap limit ? can list down cap limit for weida and cheewah ?

QUOTE(king_majesty @ Feb 22 2016, 11:29 AM)
Rule of thumb is that you should avoid non-bank backed Investment Banks.
They have very high cost of fund in which translate to higher interest cost to you.
Next is to look at each IB's policy on marginable or capping of each counters.

Few thing to avoid billshock,
-fee on un-utilized facility, some chargers handling fee annually if you leave your facility dormant
-qtr rollover, some has 0.25%, 0.5%, some none
-redemption fee, (something like those credit card balance transfer to another bank

also another thing is to ask if they would refund your stamp duty. they normally refund when hit certain criteria & timeline  (2x margin limit turnover, brokerage = stamp duty)
My take:
CIMB
-one of the best I've used. but dealers aren't that responsive. Expect little to no service but compensated by their good online platform
-try catching them doing mistakes, they normally response by cutting rates & such.

Maybank
-Ace 50%, Midcap 80-100%, Full Value of Large cap.
-slow, sometimes would hit problem when buying, takes half to 1 day to resolve the issue

Public
-by far the worst amongst the list in terms of counter capping.
-paid 10k for stamp duty to find out the 5 counters which i subsequently wanted to buy either have no limit or 20% capping.
-ever since that, i've close off the facility.

RHB/Hong Leong/Alliance
-somewhere in between, neither cheap not expensive, not much to comment.
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officeBoy
post Feb 23 2016, 05:33 PM

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Damn, the cap limit is so much better compare to PBB.

here is what i got from PBB this morning.
Weida = RM1.5
Cheewah=0.3

Thanks king for helping up ...May i know which branch of maybank and CIMB using? could other CIMB branch provide better service ?

QUOTE(king_majesty @ Feb 23 2016, 11:10 AM)
as usual, CIMB didnt pick up my phone, checked with Maybank, Cheewah 80% capping, Weida 100%.
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officeBoy
post Feb 25 2016, 10:01 PM

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oh...that's bad

officeBoy
post Feb 25 2016, 10:02 PM

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Thanks for update! but that's bad

QUOTE(foxxy @ Feb 24 2016, 04:09 AM)
From HLB as at 22 01 16
Cheewah - Nil
Weida - RM1.40 with 95% of MV
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officeBoy
post Feb 25 2016, 10:29 PM

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Foxxy, what you means by MV ?

QUOTE(foxxy @ Feb 24 2016, 04:09 AM)
From HLB as at 22 01 16
Cheewah - Nil
Weida - RM1.40 with 95% of MV
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