Depends on the bank.

1. Maybank's share margin is working more or less this way

2. U still settle all, your margin account goes up 10K

3. Charged monthly if not mistaken, but calculated daily for M2U

4. Based on PURCHASE PRICE, or loaned amount, not market price.

5. I'm not sure, should be interest only, unless either u close the margin account or maybe margin expiry? Based on M2U agent, they mentioned no duration limit!!!




For those still into this, M2U is having promotion till June I think.
Interest is BLR - some percentage, forgot.
I think net is around 3.XX percent, quite cheap I think.
Sound ok to even just buy, say Guiness and just wait for dividend...

Apply before June, u will be entitled to a fixed rate FOREVER.
I didnt believe that as well, but that is what the agent told me over the phone.
I'm gonna go check it out soon.

Margin trading account and margin financing is two different thing.
Margin trading account is whereby u can buy without upfront money, then top up before T+3.

For M2U margin financing (MF), the good thing from what I was told, is no charges if you don't use, except for the first time minimal application charges, or maybe some yearly fixed charges.

Also I was told they only charge based on the margin account usage, not the margin account limit.

The M2U MF application form has some fields for asset declaration, as well as debt declaration. I suppose every bank / scheme has some formula for margin limit calculation.

Remember also this is SHARE MARGIN FINANCING, so probably u cannot take out cash.

I don't quite agree with keeping shares for dividend is equiv to keeping cash under pillow.
Many of my shares are giving good enough dividend to warrant paying for long term.
Guiness is one such share.

I'm not sure how the banks can categorize your share purchase for investment purposes, or for speculating. I'm guessing its just a guideline.

Whizzer, thanks for mentioning commitment fees, I will check out if the M2U MF indeed has no commitment fees, and also on the calculation for rollover interest.
Will also definitely pay attention to any equity ratio.

Haiya... just went MBB Investment Centre to check out the promotion.
Seems that I have missed the boat for 3.75% margin financing account!!! If your margin limit is 250K+, it was even lower at 3.25%.

They have increased the rate to around 4.5% (below 250K) liao...
But still okay rate lah.

I have also confirmed that the rate is fixed FOREVER!

Also, no commitment fee below 250K approved limit.
But first time charges quite high around RM700.

For equity ratio, it is around 65%.
Eg, if your shares value is 100K, and your margin financing account is at around 65K, then you will have to either top up money or sell some shares.
So safest to apply limit of 50K if you holding 100K shares, then use only up to 50% of approved limit.

I have also checked and no limitation on what kind of shares you can buy, eg long term / contra also can.

Possibly that MBB is no longer giving discount.
A friend & forummer here was quoted BLR + 1.5 recently.

I have secured mine at BLR -1.5 just a month or two back from MBB for 250K limit with no commitment fee.

For MBB BLR -1.75, is for margin limits above RM500K, but will incur commitment fee.

The no commitment fee is reason why I didn't apply for the BLR -1.75 package.

MBB's safe FMR ratio is around 60%, eg 0.6 when I applied.
However, this ratio is revised time to time, depending on market conditions.

If u dun mind the initial costs, having a margin is equiv to bank overdraft facility, but cheaper rates.
T+3? No problem, pick it up and sell off later, if u're confident of the counter.
Having this safety net will make a huge difference for those who trades contra regularly.