Posted by talkking > 2014-03-20 23:16 | Report Abuse

immediately come kingleecha who pretending to be expert...first sentence oredi know u pretend

High Risk, High Return? Perhaps high debt.

Posted by fusing79 > 2014-03-21 09:34 | Report Abuse

Can someone teach me what is margin account? Is it borrowing money? Do we need to pay installment monthly? Is the interest only 4.6% only?

Posted by stockcrazy > 2014-03-21 17:36 | Report Abuse

Dear Mr. Koon,

Do you think the palm oil windfall profit tax (WPT)will effect the profit of the planter?


For peninsula-based oil palm plantation players, a 15% WPT is imposed when the CPO price threshold reaches RM2,500 per tonne and above.

For oil palm planters in Sabah and Sarawak, a 7.5% WPT is imposed when the CPO price hits RM3,000 per tonne and above.

Posted by Alphabeta > 2014-03-21 21:12 | Report Abuse

Dear fusing79, I will try my best to explain the share margin financing arrangement.

Bursa rules stated clearly that broker must ensure client share margin of financing ratio (“SMF”) to be equal or higher than 150% at all time.

SMF ratio = Total Equities/Total loans outstanding

Total equities = discounted shares collateral value.
You to scout around for Broker that gives you better value for your shares collateral.

Total loans outstanding = outstanding purchases contracts, interest charges, debit notes and rollover fees less cash deposit less credit notes less credit interest from the cash deposit (if any).

When your SMF ratio falls below 150%, a margin call will be initiated by the broker and you will be given 3 trading days to rectify the SMF ratio.

Failing which the broker will take step to sell the shares held as collateral in the margin account. You can either top up your SMF with cash or additional ‘acceptable’ shares collateral to bring the SMF ratio above 150%.

Please take note that “acceptable share collateral” means brokers might not accept certain stock due to;
a> broker has too many of the particular stock, or
b> internal policies prohibit giving value to a particular stock as the listed company could be a major shareholder of the broker, or
c> the particular stock is listed under PN4 or PN17, or
d> it could be also due to the broker’s policy not to give value to derivatives (for example “warrants”).

For simplicity, assuming you open an SMF account with a broker and place a cash deposit of RM 100,000. You purchase 250,000 shares of company A at RM 1 per share. If the broker only accept 80% of the collateral market value, then the total equities will be 250,000 shares x RM 1.00 x 80% = RM 200,000.
Total loans outstanding will be RM 150,000 (RM 250,000 – RM 100,000).
SMF ratio = RM 200,000/RM 150,000 = 133%

Result = SMF Ratio is below 150%, therefore margin call is issued.

You will have 3 market days to rectify your position.

Posted by talkking > 2014-03-21 21:44 | Report Abuse

Another pretender alphabeta. You google well but info still wrong...so many pretenders here. Mr Koon using margin financing cater to ftse top 100 by market cap in jtiasa. Different mof product have different mfl,mof,mc and fs. Mr Koon can testify accuracy of my statemement.

anymore pretender...come come

Posted by Alphabeta > 2014-03-21 22:45 | Report Abuse

Dear talkking, i have said upfront that i will try my best to explain the share margin financing. I have not used margin financing for quite a while, Bursa could have change the rules on the ratio requirement but the principle remain the same.

Since you are an expert in this area, why don't you share with us your practical experience in this area based on the latest development. I think fusing79 will appreciate your generosity.

Posted by talkking > 2014-03-21 23:25 | Report Abuse

not only ratio is wrong. there r sooo many wrong

"I have not used margin financing for quite a while"

OR NEVER USE MOF LOH!


"You to scout around for Broker that gives you better value for your shares collateral."

WRONG. ALL BANK INTEREST RATE PA SAME AND VARY AS PER YOUR FACILITY LIMIT LOH. BORROWING LIMIT FOR CASH IS 2X& QUOTED SHARES 1.5X. LATEST RATE FROM RHB BANK LOH!


"Total loans outstanding = outstanding purchases contracts, interest charges, debit notes and rollover fees less cash deposit less credit notes less credit interest from the cash deposit (if any)."

FORMULA VERY WRONG. ROLLOVER FEE IS ZERO PER QUARTER FOR FTSE TOP 100 INDEX. NO DEBIT NOTE AND INTEREST CHARGES AND THE LESS STUFFF!


"Please take note that “acceptable share collateral” means brokers might not accept certain stock due to;
a> broker has too many of the particular stock, or

WRONG. FOR FTSE TOP 100 MOF, PLEDGED SECURITIES MUST COMPRISE ONE OR MORE SECURITIES FROM TOP 100.

EXAMPLE, TO BORROW MONEY BUY JTIASA, YOU MUST PLEDGED MAYBANK OR THOSE IN TOP100 AS COLLATERAL LOH!

b> internal policies prohibit giving value to a particular stock as the listed company could be a major shareholder of the broker, or

WRONG. EVERYTHING BASED ON MOF PRODUCTS AND SECURITIES COMPOSITION.

c> the particular stock is listed under PN4 or PN17, or

NEVER USE MOF TO BUY LOUSY STOCK LOH!

d> it could be also due to the broker’s policy not to give value to derivatives (for example “warrants”)."

WRONG. CAN BUY LOAN STOCKS AND WARRANTS USING OTHER MOF PRODUCTS EXCEPT FTSE TOP100 LOH!!!!


"If the broker only accept 80% of the collateral market value, then the total equities will be 250,000 shares x RM 1.00 x 80% = RM 200,000.
Total loans outstanding will be RM 150,000 (RM 250,000 – RM 100,000).
SMF ratio = RM 200,000/RM 150,000 = 133%"

WHAT 80% MARKET VALUE!!! REFER BACK TO MOF PRODUCTS AND SECURITIES COMPOSITION LOH!!!

Posted by talkking > 2014-03-21 23:33 | Report Abuse

come come all "expert"...let me have fun

Posted by Alphabeta > 2014-03-22 09:03 | Report Abuse

Dear talking, thanks for your reply. Correct me if I am wrong, my understanding is that all brokers must adhere to the SMF ratio set by Bursa. The current ratio may not be 150%, the latest I know is 130%.

If any of their client account’s SMF ratio breached this due to deterioration of collateral value and failed to regularize within the stipulated time, the broker will face penalty from Bursa. Naturally, the brokers would like to play safe, work around the rule and at the same time not upsetting their clients by telling them I will discount 20% of your collateral market value.

WRONG. ALL BANK INTEREST RATE PA SAME AND VARY AS PER YOUR FACILITY LIMIT LOH. BORROWING LIMIT FOR CASH IS 2X& QUOTED SHARES 1.5X. LATEST RATE FROM RHB BANK LOH!

2X or 1.5X of quoted shares is the end result after they consider all the risk profile. It means the same thing, for example 1.5X means if you give blue chips as collateral. Without discounting of your share collateral, your SMF ratio is 167% (2.5/1.5). Most probably they will discount your blue chips by say 90% and arrived at SMF ratio of 150%.

If the current Bursa SMF ratio is 130%, then they will make margin call at 150% which is much earlier than the 130% set by Bursa. This is the margin of safety they give themselves should the market collapse.

"You to scout around for Broker that gives you better value for your shares collateral."

WRONG. ALL BANK INTEREST RATE PA SAME AND VARY AS PER YOUR FACILITY LIMIT LOH. BORROWING LIMIT FOR CASH IS 2X& QUOTED SHARES 1.5X. LATEST RATE FROM RHB BANK LOH!

I do not know whether you have check with other broker whether they can offer you same facility limit with the similar but less share collateral.


"Total loans outstanding = outstanding purchases contracts, interest charges, debit notes and rollover fees less cash deposit less credit notes less credit interest from the cash deposit (if any)."

FORMULA VERY WRONG. ROLLOVER FEE IS ZERO PER QUARTER FOR FTSE TOP 100 INDEX. NO DEBIT NOTE AND INTEREST CHARGES AND THE LESS STUFFF!

If you put in cash, they will pay you a nominal interest income. Maybe you are use to put in quoted shares as collateral.

"Please take note that “acceptable share collateral” means brokers might not accept certain stock due to;
a> broker has too many of the particular stock, or

Try to put in collateral that they don’t accept during margin call.

Posted by fusing79 > 2014-03-23 16:14 | Report Abuse

Thank you so much to Alphabeta, you have try to make me understand, of couse I still have some unclear points here as I am totally new. I think I should call the broker to check more.

Hi, talkking you giving nothings here but just making the conversation unhappy.
A peevish child is unhappy and makes others unhappy.

Please learn how to respect others. Thank you so much for your understand.