Have you ever missed any investment opportunity in the stock market due to insufficient capital? Chiyu Bank's Securities Margin Trading Service offers you additional funds for investment in designated stocks*, allowing you to grasp every opportunity in the ever-changing stock market to generate higher potential returns.
* You may login Internet Banking or Mobile Banking or contact our staff for enquiry about the list of designated securities. Chiyu Bank reserves the right to amend the loanable securities list without prior notice.
With extra investment capital of up to 70% of the prevailing market value of designated stocks, you will be able to yield higher potential returns.
Attractive interest rate** is offered to your margin loan. As the interest will be calculated based on your daily outstanding amount and settled on a monthly basis, you can benefit from lower investment cost.
** Subject to the interest rates quoted by Chiyu Bank from time to time.
Cash balance in your securities margin trading account helps generate additional interest# income and help you further increase your investment return.
# Subject to the Hong Kong Dollar savings deposit rates quoted by Chiyu Bank from time to time.
To enjoy this service, simply visit any of our branches to set up the securities margin account. For your greater convenience, you can trade or make margin transfer via our Internet Banking or manned trading hotlines. In addition, you can make margin via our branches.
After successful registration, a free SMS## will be sent to your mobile phone for easy reference once your transaction is completed.
##Only applicable to the mobile phones served by GSM network.
Assume stock loanable percentage at 60%
| Customer's available capital | $40,000 |
| Maximum value of the designated stock that you can buy | $100,000 [$40,000/(100% - stock loanable percentage)] |
| If the customer buys the stock, the margin account portfolio will be as follows: | |
| Total loan | $60,000 |
| Effective loanable value | $60,000 （Market value of the stock × stock loanable percentage） |
| Margin ratio( = Total loan / effective loanable value) | 100% (= $60,000 / $60,000) |
Scenario 1:
If the market value of that stock increases by 10% to $110,000
| Margin ratio | 90.91% (= $60,000 / $66,000) |
| Profit earned after the stock sold | $10,000 (excluding interest and transaction handling fees) |
| Rate of return | 25% (= $10,000 / $40,000) |
Scenario 2:
If the market value of that stock decreases by 17% to $83,000
| Margin ratio | 120.48% (= $60,000 / $49,800) |
| The stock will be sold by the Bank once the margin ratio reaches the sell-out level. | |
| The amount lost after the stock sold | $17,000 (excluding interest and transaction handling fees) |
| Rate of return | - 42.5% (= -$17,000 / $40,000) |
For further information, please visit any of our branches or call our enquiry hotline at (852) 2232 3625.
* Reminder: To borrow or not to borrow? Borrow only if you can repay!
Important Notes
The below risk disclosure statements cannot disclose all the risks involved. You should undertake your own research and study before your trade or invest. You should carefully consider whether trading or investment is suitable in light of your own financial situation, investment experience, investment objectives, risk tolerance and ability to understand the nature and risks of the relevant product. You are advised to seek independent financial and professional advice before you trade or invest. You should seek independent professional advice if you are uncertain of or have not understood any aspect of the following risk disclosure statements or the nature and risks involved in trading or investment.
Risk of Securities Trading
The prices of securities fluctuate, sometimes dramatically. The price of a security may move up or down, and may become valueless. It is as likely that losses will be incurred rather than profit made as a result of buying and selling securities.
Risk Disclosure of Securities Margin Trading
The risk of loss in financing a transaction by deposit of collateral is significant. You may sustain losses in excess of your cash and any other assets deposited as collateral with the licensed or registered person. Market conditions may make it impossible to execute contingent orders, such as "stop-loss" or "stop-limit" orders. You may be called upon at short notice to make additional margin or interest payments. If the required margin or interest payments are not made within the prescribed time, your collateral may be liquidated without your consent. Moreover, you will remain liable for any resulting deficit in your account and interest charged on your account. You should therefore carefully consider whether such a financing arrangement is suitable in light of your own risk tolerance, financial situation, investment experience, investment objectives, investment horizon and investment knowledge.
You are reminded to understand the relevant details, charges and important notes before investing in Shanghai A shares or Shenzhen A shares. For details, please read the “Important Notice of Trading China A Shares and A Shares Margin Trading via Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect” in Chiyu Bank’s website or the branch staff of Chiyu Bank. Details
Risk Disclosure of Trading A Shares via Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect
Not protected by Investor Compensation Fund: Investors should note that any SH Northbound Trading or SZ Northbound Trading under Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect will not be covered by Hong Kong’s Investor Compensation Fund. Also, China Securities Investor Protection Fund will not protect any SH Northbound Trading and SZ Northbound Trading as well.
Quotas used up: When the daily quota is used up, acceptance of the corresponding buy orders will also be immediately suspended and no further buy orders will be accepted for the remainder of the day. Buy orders which have been accepted will not be affected by the using up of the daily quota, while sell orders will be continued to be accepted.
Trading day difference: As mentioned above, Shanghai-Hong Kong Stock Connect or Shenzhen-Hong Kong Stock Connect will only operate on days when both markets are open for trading and when banks in both markets are open on the corresponding settlement days. So, it is possible that there are occasions when it is a normal trading day for the Mainland China market but Hong Kong investors cannot carry out any A-share trading. Investors should take note of the days Shanghai-Hong Kong Stock. Connect or Shenzhen-Hong Kong Stock Connect is open for business and decide according to their own risk tolerance capability whether or not to take on the risk of price fluctuations in A-shares during the time when Shanghai-Hong Kong Stock Connect or Shenzhen-Hong Kong Stock Connect is not trading.
Restrictions on selling imposed by front-end monitoring: For investors who usually keep their A-shares outside of their brokers, if they want to sell certain A-shares they hold, they must transfer those A-shares to the respective accounts of their brokers before the market opens on the day of selling (T day). If they fail to meet this deadline, they will not be able to sell those A-shares on T day.
The recalling of eligible stocks: When a stock is recalled from the scope of eligible stocks for trading via Shanghai-Hong Kong Stock Connect or Shenzhen-Hong Kong Stock Connect for above-mentioned reasons, the stock can only be sold but restricted from being bought. This may affect the investment portfolio or strategies of investors. Investors should therefore pay close attention to the list of eligible stocks as provided and renewed from time to time by both Exchanges.
Risks of client assets received or held outside Hong Kong: Client assets received or held by the licensed or registered person outside Hong Kong are subject to the applicable laws and regulations of the relevant overseas jurisdiction which may be different from the Securities and Futures Ordinance (Cap.571) and the rules made thereunder. Consequently, such client assets may not enjoy the same protection as that conferred on client assets received or held in Hong Kong.
Conversion Limitation Risk of RMB (Only applicable to Individual Customers)
RMB investments are subject to exchange rate fluctuations which may provide both opportunities and risks. The fluctuation in the exchange rate of RMB may result in losses in the event that the customer converts RMB into HKD or other foreign currencies. RMB is currently not fully freely convertible. Individual customers can be offered CNH rate to conduct conversion of RMB through bank accounts and may occasionally not be able to do so fully or immediately, for which it is subject to the RMB position of the banks and their commercial decisions at that moment. Customers should consider and understand the possible impact on their liquidity of RMB funds in advance.
Conversion Limitation Risk of RMB (Only applicable to Corporate Customers)
RMB investments are subject to exchange rate fluctuations which may provide both opportunities and risks. The fluctuation in the exchange rate of RMB may result in losses in the event that the customer converts RMB into HKD or other foreign currencies. RMB is currently not fully freely convertible. Corporate customers that intend to conduct conversion of RMB through banks may occasionally not be able to do so fully or immediately, for which it is subject to the RMB position of the banks and their commercial decisions at that moment. Customers should consider and understand the possible impact on their liquidity of RMB funds in advance.
