Affin Hwang Investment eyes RM50m securities lending for 2019

Affin Hwang Capital group managing director Datuk Maimoonah Hussain and Bursa Malaysia CEO Datuk Seri Tajuddin Atan at the fficial launch of the Retail Securities Borrowing and Lending (Retail SBL) programme on Jan 17, 2019.

KUALA LUMPUR: Affin Hwang Investment Bank Bhd 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.

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 told reporters after the launch of the programme here today.

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.

Bursa Malaysia chief executive officer Datuk Seri Tajuddin Atan said SBL allows stockholders to enhance their returns by lending their stocks to other investors for the purpose of short-selling, hedging, arbitraging and failed trade settlement.

He said 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.

As at December last year, there were 1.87 million active retail accounts worth RM137.3 billion, contributing to 17 per cent of the trade volume in the stock exchange. - Bernama