Margin calls on the rise as share prices plunge

A remisier told StarBiz that the number of investors receiving margin calls has “increased tremendously” over the past week, especially with the FBM KLCI falling by almost 4% on Monday and many oil and gas stocks posting sharp declines.

PETALING JAYA: Increasing margin calls over the past week has raised concerns about its potential impact on the market, which has already been hit due to uncertainties relating to the Covid-19 outbreak, political uncertainties and the recent crash in oil prices.

An increase in margin calls generally puts further pressure on share prices, resulting in a vicious cycle.