Trade in Multiple Markets with Multi-Currency Financing Facility
Trade with direct access to multiple key financial markets such as the Singapore Exchange (SGX), Bursa Malaysia (Bursa), Hong Kong Exchange (HKEx), New York Stock Exchange (NYSE), NASDAQ Stock market (NASDAQ) and Stock Exchange of Thailand (SET). Take control of your foreign exchange exposure with competitive debit interest rates on multiple currencies, computed on a daily rest basis.
Pick Your Interest Rate According to Your Investment Style
Choose between our Flat or Grade Based Interest Rate Scheme according to the types of securities in your portfolio. With the Grade Based Interest Rate Scheme, you can now leverage your high quality securities to enjoy lower margin financing rates and build your investment portfolio.
With effect from 23 September 2022, the table below reflects the revised interest rates:
|
Currency |
Flat Interest Rate |
Grade Based Interest Rate*** |
|||
|
All Securities |
Fixed Income Securities** |
Grade 1 |
Grade 2 |
Grade 3 |
|
|
SGD |
5.80% |
3.80% |
3.80% |
5.00% |
7.10% |
|
USD |
6.00% |
5.00% |
5.00% |
6.00% |
7.50% |
|
HKD |
6.00% |
4.00% |
4.00% |
5.20% |
7.30% |
*For corresponding interest grades and valuation percentages of various securities in multiple markets, please click here.
**Only applicable for a list of over 90 eligible fixed income securities, including those issued by financial and non-financial corporates and quasi-government organisations.
***For existing Margin clients, to opt into our Grade Based Interest Rate Scheme, please download this form and send the original back to Margin Finance Department or your Trading Representative.
7 Days Interest-Free Period
Enjoy more flexibility in your investment decisions with an extra 7 days interest-free* grace period on trades settled in SGD from the due date for all purchases funded under our Margin Facility.
*Only applicable for margin clients paying margin account standard scaling commissions.
Up to 3.5 Times Leverage
We provide a credit line to clients to finance the purchase of securities. It is secured by a pledge of cash and/or marginable securities as collateral and is extended to both individual and corporate investors.
You can multiply your investment value with financing of up to 3.5 times the amount of cash pledged, or up to 2.5 times the amount of securities pledged, to reap greater returns.
No Dividend Processing Fees
We do not charge additional administrative or processing fees other than out-of-pocket expenses that are levied against you for your dividend entitlements. We handle all other corporate actions for you at minimal cost.
No Maintenance Fees
We do not charge maintenance fees of any kind on your Margin Trading Account.
Trade Online or Through Your Trading Representative
Margin Facility gives you the flexibility to trade via our online trading portal, Maybank Trade, or through your Trading Representative, so you'll never miss out on time-critical opportunities.
Pledge Your Equity and Debt Securities to Increase Investment Power
No cash for trading? We accept a wide range of equity and debt securities which you can pledge in exchange for a margin to trade.
You have SGD10,000 for share trading.
The following table shows an example of how it works.
| Initial Capital Outlay S$10,000 |
Without Margin |
With Margin |
| Capital Gain* (assuming share price increases by 10%) |
S$1,000.00 | S$3,500* |
| Margin Financing Charge@2.80% | S$0.00 | S$700 |
|
Net Return* |
S$1,000.00 | S$2,800.00* |
|
Effective Rate of Return* |
10% | 28%* |
*For illustration purposes only. Trade commissions and other fees were not included in the calculations.
Margin Call and Forced Selling when using a Margin Trading Account (Grade Based Interest Rate Scheme)
Margin calls are issued once the total collateral in the margin account falls below a minimum percentage of the total amount financed called the margin ratio.
We will illustrate this by using the example in illustration 2 where a SGD750,000 bond is purchased with deposit of SGD250,000 cash as collateral:
| Day 1 |
Day 2 (Assuming the value of bonds drops 10%) |
|
| Value of cash pledged | SGD250,000 | - |
| Value of bonds bought | SGD250,000 × 3 = SGD750,000 | SGD675,000 |
| Amount of financing | SGD500,000 | SGD500,000 |
| Margin Ratio | SGD750,000 ÷ (SGD750,000 - SGD250,000) = 150% | SGD675,000 ÷ SGD500,000 = 135% |
If margin ratio falls below 140%
You are required to provide additional cash (in this case, SGD17,858), marginable securities or liquidate positions within 5 market days, failing which we will liquidate the required amount of securities to bring the margin ratio to 140% or above.
If the OTC bond position has to be liquidated, it will be liquidated per tranche of either SGD250,000 for SGD issues or USD200,000 (or equivalent) for other currency issues. No partial amount per tranche can be liquidated.
If margin ratio falls below 130%
At our discretion, we may liquidate positions to cover the minimum margin ratio without notification. No deposit of marginable shares is allowed for forced selling.
*Examples, definitions and summaries included on this page are intended for illustrative purposes only, and are not to be relied upon as advice or interpreted as a recommendation.
Maybank Securities will not be liable to you or anyone else, for any damages whatsoever and howsoever caused (including direct, indirect, incidental, special, consequential, exemplary or punitive damages) arising out of or in connection with any errors in or omissions in the illustrations, definitions and/or summaries provided here, even if Maybank Securities has been advised of the possibility of these damages.
What is a Margin call?
Margin Ratio (MR) = [(Value of shares pledged#+ Value of shares bought using Margin Facility#) 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
Example:
| Day 1 |
Day 2 (Assuming the value of shares bought drops to SGD23,000) |
|
| Value of shares pledged | SGD10,000 | SGD10,000 |
| Value of shares bought | SGD 10,000 × 2.5 = SGD25,000 | SGD23,000 |
| Amount of financing | SGD25,000 | SGD25,000 |
| Margin Ratio | SGD10,000 + SGD25,000) ÷ SGD25,000 = 1.4 × 100% = 140% |
(SGD10,000 + 23,000) ÷ (SGD25,000) = 1.32 × 100% = 132% |
What Happens when the Margin Ratio is Less than 140%?
A margin call is triggered and you are required to provide additional cash, marginable shares or liquidate shares within 5 market days, failing which we will liquidate the required amount of securities to bring the Margin Ratio to 140% or above.
The deposit of marginable shares can only be made on the first 4 days of the margin call in order to obtain confirmation from CDP before the market closes on the following day.
No new trades except for the liquidation of the existing positions will be allowed for the Margin Account once a margin call is made.
What Happens when the Margin Ratio is Below 130%?
At our discretion, we may liquidate securities to cover the margin without notification. No deposit of marginable shares is allowed for a force-selling call.
With our Grade Based Interest Rate Scheme*, you can now leverage your high quality securities to enjoy lower margin financing rates and build your investment portfolio.
|
Grade of Marginable Securities
|
Interest Rate (p.a.)
|
||
|
SGD
|
USD
|
HKD
|
|
|
Grade 1
|
3.80%
|
5.00%
|
4.00% |
|
Grade 2
|
5.00%
|
6.00%
|
5.20% |
|
Grade 3
|
7.10%
|
7.50%
|
7.30%
|
We classify more than 900 equity and debt securities as Grade 1 securities, which you can pledge or buy and enjoy financing rates as low as 3.8% p.a. For corresponding interest grades and valuation percentages of various securities in multiple markets, please click here. Refer to Interest Calculator to check if your investment portfolio will benefit from our Grade Based Interest Rate Scheme.
The interest will be calculated based on Grade 1 interest rates until the maximum loan amount supported by the Grade 1 securities is used up, then based on Grade 2 interest rates and finally based on Grade 3 interest rates.
*Interest rates subject to change and may not reflect the latest rates.
To Enjoy a Low Interest Rate of 3.8%:
- Pledge/transfer Grade 1 securities and you can buy any type of security up to the maximum loan amount supported by the collateral value of Grade 1 securities.
The more Grade 1 securities you pledge, the higher the loan amount you can enjoy at 3.8% regardless of what securities you intend to buy.
Want to borrow more than the loan amount supported by Grade 1 securities? Simply transfer in more Grade 1 securities to enjoy the low rate!
- Deposit cash and buy Grade 1 securities.
Illustration2
Assume you deposit SGD10,000 cash and buy SGD35,000 worth of Grade 1 shares.
| Total amount financed | SGD25,000 |
| Total collateral value of all Grade 1 shares (valued1 at 100%) | SGD35,000 |
| Maximum loan amount supported by Grade 1 shares | SGD35,000 ÷ 140%3 = SGD25,000 |
Therefore, the full loan amount of SGD25,000 is chargeable at 2.8%.
Illustration2 of Single Currency Loan
Assume you pledge SGD10,000 worth of Grade 1 shares and buy SGD10,000 worth of Grade 2 shares.
| Total collateral value of all Grade 1 shares (valued1 at 100%) | SGD10,000 |
| Total collateral value of all Grade 2 shares (valued1 at 70%) | SGD7,000 |
| Maximum loan amount supported by Grade 1 shares | SGD10,000 ÷ 140%3 = SGD7,142.86 chargeable at 2.8% |
| Maximum loan amount supported by Grade 2 shares | SGD7,000 ÷ 140%3 = SGD5,000.00 chargeable at 4.5% |
| Total amount financed | SGD10,000 |
| Annual Blended Interest | [7,142.86 × 2.8%] + [(10,000 - 7,142.86) × 4.5%] = SGD329 |
| Annual Flat Interest | 4.8% × 10,000= SGD480 |
Grade Based Financing saves you SGD151 annually!
Illustration2 of Multi-Currency Loan
Assume you pledge HKD100,000 of Grade 1 shares, and buy USD8,000 and SGD10,000 worth of Grade 1 shares. All these Grade 1 shares are valued at 100%.
Exchange rates are: USD to SGD = 1.43, HKD to SGD = 0.19.
| Collateral value of all Grade 1 shares (valued1 at 100%) | |
| + SGD19,000 (HKD100,000 × 0.19) | |
| + SGD11,440 (USD8,000 × 1.43) | |
| + SGD10,000 | |
| Total | SGD40,440 |
Maximum loan amount supported by Grade 1 shares
= SGD40,440 ÷ 140%3 = SGD28,885.71
| Loan Amount Composition | |
| + SGD11,440 (USD8,000 × 1.43) | |
| + SGD10,000 | |
| Total | SGD21,440 |
As the total SGD equivalent loan amount does not exceed the maximum Grade 1 loan amount of SGD28,885.71, both SGD and USD loans will be charged at their respective Grade 1 interest rates.
|
|
Annual Grade Based Interest
|
Annual Flat Interest
|
|
SGD
|
10,000 × 2.8% = SGD280
|
10,000 × 4.8% = SGD480 |
|
USD
|
8,000 × 3.1% = USD248
|
8,000 × 5.1% = USD408
|
Grade Based Financing saves you SGD200 and USD160 annually!
Footnote:
1 For corresponding valuation percentages and interest grades of various securities in multiple markets, please click here.
2 Figures are for illustration purposes only.
3 140% is the minimum Margin Ratio to be maintained. Margin Ratio = Total Collateral value ÷ Loan Amount.
Terms and Conditions for Grade Based Financing Scheme:
The Grade Based Financing Scheme shall apply only to loans utilised in Singapore Dollar, United States Dollar and Hong Kong Dollar. Interest imposed on the amount of financing made available to the Client's Margin Account shall be chargeable to the Client's Margin Account on a monthly basis, computed daily according to the schedule of interest rates. The interest rate chargeable on the Margin Account is dependent on the quality of the Marginable Securities in the Client's margin portfolio. Maybank Securities reserves the right to revise or vary the securities' grading based on the proprietary methodology on a quarterly basis without notice or explanation. Maybank Securities reserves the right to change the margin financing rates. Standard Margin Facility Terms and Conditions apply.
IPO financing allows you to subscribe for up to 5 times more Initial Public Offering (IPO) shares with a minimum of 20% down payment.
A bigger subscription amount increases the likelihood of bigger allotment of IPO shares. Assuming that you were to subscribe for 10,000 shares of an IPO at $1 per share, if the allotment rate is 50% you will be allotted only 5,000 shares. Using our IPO financing facility, with the same $10,000 initial capital, you will be able to subscribe for 50,000 of the same IPO shares, and be allotted 25,000 IPO shares instead.
Illustration
Assuming you bought IPO shares at SGD1.00 per share with an initial capital of SGD10,000 and subsequently, the share price increased to SGD1.10.
| Without an IPO Financing Facility (Subscribe to an IPO worth SGD10,000) |
Using an IPO Financing Facility (Pledge SGD10,000 as collateral and subscribe to an IPO worth SGD50,000) |
|
| Day 1 | Client subscribes for 10,000 IPO shares @ SGD1.00 | Client subscribes for 50,000 IPO shares @ SGD1.00 |
| Day 10 | Client gets allotted 5,000 IPO shares @ SGD1.00 | Client gets allotted 25,000 IPO shares @ SGD1.00 |
| Day 11 | Client sells 5,000 IPO shares @ SGD1.10 | Client sells 25,000 IPO shares @ SGD1.10 |
| Gross gain | SGD500 | SGD2,500 |
| Interest on loan | - | (SGD50,000 – SGD10,000) × 5% × (10÷365) = SGD54.80 |
| IPO processing fee | - | SGD50 |
| Net gain | - | SGD2,500 – SGD54.80 - SGD50 = SGD2,395.20 |
| % Return on investment | SGD500 ÷ SGD10,000 = 5% | SGD2,395.20 ÷ SGD10,000 = 23.95% |
You gain 23.95% in return on investment!
On the contrary, if there is adverse movement in the share price, the loss sustained under an IPO Financing Facility will also be greater.
Note: Your IPO subscription may result in full allotment, partial allotment or unsuccessful allotment of IPO shares. Regardless of your IPO allotment outcome, the financing interest, IPO processing fee and GST will still be chargeable.
Grading Criteria for Marginable Securities/Bonds
|
Grade
|
Market Valuation
|
Criteria
|
|
A
|
Up to 100%
|
|
|
B
|
Up to 85%
|
|
|
C
|
Up to 70%
|
|
However, any securities that are suspended for more than 5 market days will have no value in the margin account.
We reserve the right to vary the lending value for or impose a haircut or price cap on any securities.
List of Eligible Fixed Income Securities
Enjoy a special financing rate of 3.50% p.a. for margin financing of selected fixed income securities. Choose from a list of over 90 eligible fixed income securities, including those issued by financial and non-financial corporates, quasi-government organisations and REITs.
Securities Financing Availability Check
To check if your security qualifies for financing, please click here.
We reserve the right to revise or vary the interest grades without notice or explanation.
Leverage
Margin financing is a leveraged product. Its risk and return profiles are magnified several times. While the amount of the initial margin required to enter into a transaction may be small relative to the value of the transaction, a relatively small market movement would have a proportionately larger impact which may result in losses that are in excess of the initial margin/capital invested.
Margin Calls
If the market moves against the position that you are holding, it may result in margin calls or requests to place additional funds on deposits with the company to cover the shortfall in the margin requirement level to maintain the position.
If you are unable to put in the additional funds, your broker may close out the position without prior notice to you. In addition, you will still be liable for any further losses that may result from this.
Over-Exposure and Overtrading
Investors often look only at the margin required and fail to appreciate and take into account the full contract value. When trading in a large number of contracts, the total potential exposure of such contracts may be significantly beyond the investor's financial resources.