Earlier this year, 31-year-old insurance agent Heng Kai Sheng got advances on three separate credit cards to the tune of S$150,000 . With the money, he opened a share-financing account at a local bank and pledged the lot as collateral. He was granted leverage of around 3.5 times, a S$500,000 kitty Heng’s plowing into the stock market.
According to preliminary data from the Monetary Authority of Singapore, bank financing for stock purchases by retail investors rebounded in February after three consecutive months of declines. Individuals pumped around S$2 billion into equities in March, 50% more than the previous month, Singapore Exchange Ltd. data show.
“There are probably new and existing investors who aren’t leveraged who would definitely want to take advantage of the sell-off to buy shares,” said Joel Ng, an analyst at KGI Securities Pte. David Gerald, founder of investor lobby group Securities Investors Association , said he was aware that investors “may want to refinance their housing loans” in the low-rate environment to free up cash for equity investments. However, “investors should be cautious not to over-leverage” in volatile markets because they may face margin calls, he added.
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Source: The Straits Times - 🏆 8. / 63 Read more »