Phillip Securities Securities Lending Programme.

(07-08-2012, 11:19 AM)wsreader Wrote: If you have shares that are being borrowed, would appreciate it if you can share which counters.

I've never had my shares borrowed either. So much for passive income from this source.

A better source of passive income for me is actually holding the shares and receiving dividends from them!

(07-08-2012, 11:19 AM)wsreader Wrote: I have participated in CDP's lending programme for more than 9 years but never once was my shares being borrowed. So I check out what are the 4 counters mentioned in the article that are on loan giving returns of 3-4% pa. They are China Gaoxian, Hafary, Junken, World Precision, not counters that I would want to hold long term.

If you have shares that are being borrowed, would appreciate it if you can share which counters.

fyi, the original article was posted in nextinsight.

If you hold blue chips it is unlikely to be borrowed because the people borrowing your shares through SBL are usually the small fry traders/speculators. the big boys(on the big caps) have their own outlet to borrow cheaply.
also you must own significant amt of each counter before they will touch your shares to lent out.
i am not sure what other criterias they put in but i suspect if you buy/sell too often in that counter they also won't touch it. too much hassle to keep up with you.
after saying that yes some of my shares were borrowed over the years but as part of my overall portfolio, it's insignificant. fees good enough to buy a cheap dinner each mth at most.whenever it has been borrowed I will sit up and re-analyse as to whether i have miss something in my analysis. currently i only have 1 2nd liner property counter that has been borrowed but not a lot.

SGX has stated that the minimum quantity for borrowing is 50 lots per counter. But, i've experience lending around 20 lots. So you may consider signing up for the program, even you don't meet the prerequisites.

i have a few counters also above 50 lots, but none being lent out under the cdp lending scheme...seems like is realli hard to earn like a banker....

For Philips, there isn't a minimum amount of shares you need to hold to lend out. For CDP, there is, as mentioned by some forumers. I called up Philips to ask about this.

My interest was piqued after reading the original article in Nextinsight as well.

(07-08-2012, 10:55 PM)FFNow Wrote: For Philips, there isn't a minimum amount of shares you need to hold to lend out. For CDP, there is, as mentioned by some forumers. I called up Philips to ask about this.
My interest was piqued after reading the original article in Nextinsight as well.

u mean piqued by CDP or Philips?
the main plus for Philips i see is the no min cap of shares for qualifying.

Another good thing about Philips is that, they tend to commit for a longer period of time, providing more consistent return. Once they agree to borrow your shares, there's a higher chance that they will not return to you so quickly. SGX seems less willing to take risk. So they will return to you immediately once the shortist close the position.

If my shares are in demand by both companies, i would prefer to loan it to Philips. I'm speaking from my experience, the scenario might be different for different shares. Hope to hear your views.

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(07-08-2012, 10:28 PM)pianist Wrote: i have a few counters also above 50 lots, but none being lent out under the cdp lending scheme...seems like is realli hard to earn like a banker....

I think your counters need to be quite active, then there's better chance to loan out. Try contacting other brokers to see if they need your shares. They might have clients who are interested to borrow.

The rate earned is subjected to demand & supply nature of the stock's trading activity.

In other words, to enjoy at least a good rate, the stock you hold has to be deemed short-worthy - which means it has to be viewed as a crappy business to the markets. As investors ourselves, shouldn't we not be invested in these counters at the first place?

Unless it's the case of being a contrarian but I m not sure if there is any conflict of interests - i.e. you lend out your stocks and buy more on the dips.

(08-08-2012, 08:46 AM)Thriftville Wrote: Another good thing about Philips is that, they tend to commit for a longer period of time, providing more consistent return. Once they agree to borrow your shares, there's a higher chance that they will not return to you so quickly. SGX seems less willing to take risk. So they will return to you immediately once the shortist close the position.

If my shares are in demand by both companies, i would prefer to loan it to Philips. I'm speaking from my experience, the scenario might be different for different shares. Hope to hear your views.

I do not have experience with Philips lending program. Would it has higher counter-party risk with Philips vs SGX?

Probably time to think about Philips lending program, instead of staying with CDP since most of the holdings are long term

(08-08-2012, 11:22 AM)CityFarmer Wrote: I do not have experience with Philips lending program. Would it has higher counter-party risk with Philips vs SGX?

Certainly, since your shares will be transferred to Phillips Nominee account if I am not wrong.
http://www.poems.com.sg/financialservice...?value=sbl

What is the risk to a lender?

One possible risk to a lender is counterparty risk. However, this risk is mitigated through the following ways:
· Lenders only need to look to Phillip Securities, a reputable financial institution as the borrower
· Phillip Securities collects collaterals from borrower with at least 105% of market value of the loan.


Will I still be entitled corporate actions such as dividends, bonus shares and rights issues?

As a lender of the securities, although there is a transfer of legal title of the securities from you to the borrower, you remain as the beneficial owner of the securities. This means that you will still be entitled to the economic benefits (such as dividends, bonus shares and rights issues) to the securities. However, you will not be entitled to any voting rights when the securities are lent. You will need to recall your securities in order to vote.