Stock Lending

For Cash Account Only

Searching for chances to increase the rate of return but exposing to relatively low risk?

If you are holding stocks for a long period, you can lend out stocks to increase the return of your portfolio.

Advantages of lending out stock:

  1. Increase extra return of your portfolio.
  2. No minimum number of lending days, so, lending out may not affect your usual trading. You can sell the stock on T+1 after you simply notified your account executive on T.
  3. You have no need handle any operations including interest calculation etc, which will be handled by us.
  4. Dividend and rights, if any, could still be received by the lender.

What you need to do?

Stock Lending Flowchart

Examples

If you lend out 500k BYD Co. Ltd.(1211.hk) at 5% annual interest (360days) annually on 31/1/2012 (value date) and the borrower returned to you on 7/2/2012(value date), the calculation is as follows:

BYD Co. Ltd. (1211.hk)
DateClosing priceInterest for single date
31/01/2012 $24.25 $24.25 x 500,000 x 5% / 360 = $1684.03
01/02/2012 $23.65 $23.65 x 500,000 x 5% / 360 = $1642.36
02/02/2012 $24.55 $24.55 x 500,000 x 5% / 360 = $1704.86
03/02/2012 $24.65 $24.65 x 500,000 x 5% / 360 = $1711.81
04/02/2012 $24.65 $24.65 x 500,000 x 5% / 360 = $1711.81
05/02/2012 $24.65 $24.65 x 500,000 x 5% / 360 = $1711.81
06/02/2012 $24.90 $24.90 x 500,000 x 5% / 360 = $1729.17

The interest will be paid at the beginning of each month and / or on the value date of the return. In this case, you will receive $1684.03 at the beginning of February, and $10211.8 and 500k shares 1211.hk on 7/2/2012.

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Please contact your account executive or call us now.
Stock Borrowing and Lending (SBL)
Tel : (852) 2277 6622
Email : sbl@phillip.com.hk

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