SGX Lending Programme

[kagemusha]

so in essence, sounds good on paper but in reality, shares getting borrowed is very unlikely.

[dreamybear]

Rec'd letter from SGX today regarding the following notification.

Guess it's better to earn some money(hopefully more borrowers) than nothing(if shares dun get borrowed)

From my personal experience, more of my shares are being borrowed this year compared to previous years, but mostly for short durations, very small quantity and since share prices for those borrowed are low, don't really earn much.

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SGX: Switches to variable rate pricing for share borrowing/lending
Published: 07 October 2019

Participants in the SGX Securities Borrowing and Lending (SBL) Programme, take note: From 2 Dec 2019, you will pay or receive fees that vary according to factors such as the supply and demand of the securities.....

In a letter to SBL participants, SGX also said it is tweaking another aspect of the fee structure: Lenders will get a fixed 70% of the borrowing fee, which is higher than the current 66.67% (4% lending fee) of the borrowing fee.

In essence, it is a slightly higher percentage of a likely lower fee......

Read more : https://nextinsight.net/story-archive-ma...ng-lending

[dreamybear]

Borrowing rate for index stocks, Reits (real estate investment trusts) and business trusts drop from 6% to 0.5% ?!?! Will it encourage more people to borrow ?  Hmmm....

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SGX to replace fixed rates for securities borrowing and lending with variable rates from Dec 2
Wed, Nov 27, 2019 - 2:16 PM

WITH effect from Dec 2, Singapore Exchange (SGX) will replace the fixed rates for its securities borrowing and lending programme with variable and more competitive rates, which will benefit both borrowers and lenders, the local bourse said in a press statement on Wednesday.

Under the current programme, the lending fee rate is fixed at 4 per cent per annum, while the borrowing fee rate stands at 6 per cent per annum.

From next Monday, the borrowing rate for index stocks, Reits (real estate investment trusts) and business trusts will be at 0.5 per cent, while the borrowing rate for the rest of the securities will be at 4 per cent. Lenders' fees will be calculated based on 70 per cent of the borrowing fee........

https://www.businesstimes.com.sg/compani...h-variable

[Shiyi]

Borrowing rate for index stocks, Reits (real estate investment trusts) and business trusts drop from 6% to 0.5% ?!?! Will it encourage more people to borrow ?  Hmmm....

---------------------------------

SGX to replace fixed rates for securities borrowing and lending with variable rates from Dec 2
Wed, Nov 27, 2019 - 2:16 PM

WITH effect from Dec 2, Singapore Exchange (SGX) will replace the fixed rates for its securities borrowing and lending programme with variable and more competitive rates, which will benefit both borrowers and lenders, the local bourse said in a press statement on Wednesday.

Under the current programme, the lending fee rate is fixed at 4 per cent per annum, while the borrowing fee rate stands at 6 per cent per annum.

From next Monday, the borrowing rate for index stocks, Reits (real estate investment trusts) and business trusts will be at 0.5 per cent, while the borrowing rate for the rest of the securities will be at 4 per cent. Lenders' fees will be calculated based on 70 per cent of the borrowing fee........

https://www.businesstimes.com.sg/compani...h-variable

Lenders stand to lose under the new scheme. The maximum lending rate will be reduced from 4% to 2.8% (70% of the 4% borrowing fee). And in the case of index stocks, REIT and business trust, the lending rate will be reduced to 0.35%. 

As lenders are generally small investors and borrowers institutional investors, this is yet another sad tale for small investors.
Sigh!

[dreamybear]

As lenders are generally small investors and borrowers institutional investors, this is yet another sad tale for small investors.
Sigh!

Yes indeed, in fact, I think equities investing, property investing as well as earned income are going to get tougher and tougher in SG. I wonder if the Gen Z are prepared ...

[weii]

As lenders are generally small investors and borrowers institutional investors, this is yet another sad tale for small investors.
Sigh!

Yes indeed, in fact, I think equities investing, property investing as well as earned income are going to get tougher and tougher in SG. I wonder if the Gen Z are prepared ...

Gen Z probably needs to be open to less well known things like share financing, CFD10, share borrowing, overseas ETFs etc. just to survive.

[Shiyi]

As lenders are generally small investors and borrowers institutional investors, this is yet another sad tale for small investors.
Sigh!

Yes indeed, in fact, I think equities investing, property investing as well as earned income are going to get tougher and tougher in SG. I wonder if the Gen Z are prepared ...

Gen Z probably needs to be open to less well known things like share financing, CFD10, share borrowing, overseas ETFs etc. just to survive.

I belong to the baby-boomer generation. Gone through many market cycles and seen quite a few blood-letting events. In my humble opinion, there is one eternal truth for investors: Don't invest (or rather speculate) the money we can't afford to lose. And do not over-leverage.