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Margin Financing


Seize the day with an extra 7-day interest-free* grace period after the due date for all purchases funded under Kim Eng Securities Pte. Ltd.'s Margin Financing Facility.

Margin Financing Facility is a credit line granted to clients by Kim Eng Securities Pte. Ltd. to finance the purchase of securities. It is secured by a pledge of cash and/or marginable shares as collateral and is extended to both individual and corporate investors.

You may obtain financing of up to the maximum of 3.5 times the amount of collateral pledged.

What's more, no additional administrative or processing fee other than out-of-pocket expenses is levied against the investor for the application of a margin account.

You can now use KE Trade for your margin trades.

* Terms and conditions apply.
How Margin Financing Works
Margin Calls
Margin Ratio
Margineable Sercurities/ Collateral
How do I open a Margin Trading Account
   
   

How Margin Financing Works

Assuming you have set aside S$10,000 for share trading.

1. Normal Trade
2. Trade funded by Margin Financing Facility
 
Purchase of shares worth S$10,000
Pledge of cash and/or shares worth an aggregate value of S$10,000 with Kim Eng Securities Pte. Ltd. Total amount of financing: S$25,000
 
Day 1: Client purchases 10,000 'A' shares @ S$1.00.
Day 3: Client sells 10,000 'A' shares @ S$1.10.
Gross gain: $1,000
(excluding brokerage*, clearing fees*, SGX Access Fees & GST*)

*Note:
Brokerage @ 0.5% + GST @ 7.0%
Clearing fees @ 0.04% + GST @ 7.0% (subject to maximum of S$600)
SGX Trading Fees @ 0.0075% + GST @ 7.0%
 
Day 1: Client purchases 25,000 'A' shares @ S$1.00.
Day 9: Client sells 25,000 'A' shares @ S$1.10.
Gross gain: $2,500
(excluding brokerage*, clearing fees*, SGX Access Fees & GST*)

*Note:
Brokerage @ 0.5% + GST @ 7.0%
Clearing fees @ 0.04% + GST @ 7.0% (subject to maximum of S$600)
SGX Trading Fees @ 0.0075% + GST @ 7.0%

  Interest charges on the amount financed @ 6.0% per annum, on a daily-rest basis

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Margin Calls

Margin Calls are issued once the total collateral in the Margin Account falls below a minimum percentage of the total
amount financed.

Computation of a Margin Call i.e. how to calculate Margin Ratio is described in the next section.
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Margin Ratio

Margin Ratio =
  (Value of shares pledged+ Value of shares bought using Margin Financing) x 100%
 
 
(Amount of financing-cash collateral pledged)

# Actual value of shares priced daily at the last done price of the previous market day or at price the company determines

For example:
Day 1

Securities deposits = S$10,000
Maximum value of shares bought = S$10,000 x 2.5 = S$25,000
Margin Ratio = ($10,000 + $25,000) ȸ $25,000 = 1.4 x 100% = 140%
 

Day 2

Securities deposits = S$10,000
Value of shares bought = S$22,500
Amount of Financing = S$25,000
($10,000 + $25,000 + $10,000 + $22,500) ȸ( $25,000 + $25,000)
= 1.35 x 100% = 135%
 
Assuming you have set aside S$10,000 for share trading.

Margin Ratio
Action Taken
Time given to meet Margin Call
140%
No Margin Call
Not applicable
<
140%
Margin Call
5 market days
130%
Force-selling Call
Immediate

A margin call must be met either by depositing additional cash, marginable shares or liquidating of shares. The deposit of
marginable shares can only be made on the first 4 day of the margin call in order to obtain confirmation from CDP before
the market closes on the following day. No deposit of marginable shares is allowed for force-selling call.

No new trades except for the liquidation of the existing positions will be allowed for the Margin Account once a margin call
is made.

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Marginable Securities/Collateral

Almost all securities quoted on the Singapore Exchange, including foreign currency denominated shares, and warrants of more than 12 months to expiration date, are marginable.

Besides local counters, we also accept selected securities listed on the main board of other recognized exchanges with shareholders funds of at least S$200 million.

However, any securities that are suspended for more than 5 market days will carry zero value in the margin account.

Kim Eng Securities Pte. Ltd. reserves the right to vary the lending value for, or impose a haircut or price cap, on any securities.

For a list of non-marginable securities, please click here.

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How do I open a Margin Trading Account?

1. All new account application forms must be signed in the presence of one of our authorized officers, in accordance with SGX-ST guidelines.
2. Please have the following documents with you when you open a Margin Trading Account with us:
a. Identity card (for Singaporeans, Permanent Residents and Malaysians)
b. Passport and Work Permit (for Foreigner)
c. Re-entry Permit (for Malaysians with Singapore Permanent Resident status)
3. For existing clients that would like to use KE Trade for margin trading, please download the Application Form for Internet Trading Services.
4. Please read our important Disclaimers.

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Should you require any information, please contact our Margin Finance Department at:
Margin Finance Department
Kim Eng Securities Pte. Ltd.
(Member of Singapore Exchange Securities Trading Limited)

9 Temasek Boulevard #12-00 Suntec Tower Two Singapore 038989
63 Market Street #12-01 Singapore 048942

Tel: (65) 6432 1849 / (65) 6231 6773   .  Email: marginfinance@kimeng.com


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