KUALA LUMPUR: Affin Hwang Investment Bank Bhd (Affin Hwang) is eyeing to achieve RM50 million in securities lending book size this year following the official launch of the Retail Securities Borrowing and Lending (Retail SBL) programme.
Affin Hwang, in collaboration with Bursa Malaysia Bhd (Bursa Malaysia), launched its Securities Borrowing and Lending (SBL) for retail investors yesterday, enabling retail investors to potentially gain more returns on their current investments.
The Retail SBL enables investors to lend assets which they already own but do not intend to sell immediately, to Affin Hwang, as the borrower. This enables the retail investors to earn interest income for lending their assets, thus potentially gaining more returns over and above the dividends they would normally receive.
According to a report by Bernama, SBL Equity Finance senior associate director Karu Ramesh Kumar said the Retail SBL programme enables investors to lend stocks that they own for a fee ranging between 0.5 per cent to 12 per cent per annum.
“This enables investors to earn interest income for lending their assets, thus potentially gaining more returns over and above the dividends they would normally receive,” he was quoted by Bernama as saying after the launch of the programme here yesterday.
He said the programme, which initially started in the third quarter last year, has successfully loaned out RM8.5 million of retail clients’ shares in less than two months in spite of the relatively slow market performance in the fourth quarter.
“Affin Hwang Investment Bank is committed to be a leader in the securities industry in Malaysia and our provision of excellence to clients through innovative products has always been our aim. The launch of this Retail SBL clearly demonstrates this commitment,” said Affin Hwang Capital Group managing director Datuk Maimoonah Hussain, in a press statement.
“Retail investors continue to play a significant role in the domestic capital market. Therefore, Affin Hwang Investment Bank, in collaboration with Bursa Malaysia, are excited to offer this new product to the retail investors to potentially enhance their idle assets’ performance,” she added.
Meanwhile, Bursa Malaysia chief executive officer Datuk Seri Tajuddin Atan commented: “As at December 2018, there were 1.87 million Retail accounts in our marketplace holding a portfolio worth RM137.3 billion.
“Premised on this, investors can generate additional income through lending out their idle securities holdings in SBL transactions, and potentially increase the overall return from their investments.”
He was quoted as saying that among attractive key features of the SBL facility is the ability to recall stocks if investors wish to sell them.
“As a lender, your credit or counterparty risk will be indemnified by the broker,” he said.
He said lenders would also maintain the economic benefits as the owner of the securities such as dividend payments, bonus or rights issue.
Affin Hwang had initially rolled out Retail SBL through only three branches to its commissioned and salaried Dealer Representatives in 3Q18, and have successfully loaned out RM8.5 million of retail clients’ shares in less than two months in spite of the relatively slow market performance in 4Q18.
Source: Borneo Post Online