Stock Borrowing & Lending

Stock Borrowing & Lending allows you to boost your opportunities by “short selling” for a longer duration and potentially benefit even if the stock market is going through a downward trend. Shorting is a classic strategy to potentially benefit when the momentum of stocks or overall trend of the market is declining. Short positions are taken not only on simple speculative bets but can also be used to execute trading strategies such as rights arbitrage, pairs trading and index arbitrage. Essentially, short positions are covered by SBL through the use of the borrowed securities to settle an outright sale.

Available Short Sell Stock List
Stock Code Stock Name Stock Code Stock Name Stock Code Stock Name
2 CLP HOLDINGS 662 Asia Financial 1361 361 DEGREES
4 WHARF HOLDINGS 688 CHINA OVERSEAS 1398 ICBC
5 HSBC HOLDINGS 696 TRAVELSKY TECH 1898 CHINA COAL
17 NEW WORLD DEV 700 TENCENT 1928 SANDS CHINA LTD
20 WHEELOCK 728 CHINA TELECOM 1988 MINSHENG BANK
27 GALAXY ENT 751 SKYWORTHDIGITAL 2007 COUNTRY GARDEN
66 MTR CORPORATION 753 AIR CHINA 2318 PING AN
83 SINO LAND 762 CHINA UNICOM 2328 PICC P&C
144 CHINA MER HOLD 811 XINHUA WINSHARE 2343 PACIFIC BASIN
151 WANT WANT CHINA 813 SHIMAO PROPERTY 2388 BOC HONG KONG
173 K. WAH INT'L 855 CHINA WATER 2600 CHALCO
175 GEELY AUTO 857 PETROCHINA 2628 CHINA LIFE
189 DONGYUE GROUP 882 TIANJIN DEV 2689 ND PAPER
242 SHUN TAK HOLD 883 CNOOC 2777 R&F PROPERTIES
267 CITIC PACIFIC 939 CCB 2800 TRACKER FUND*
272 SHUI ON LAND 941 CHINA MOBILE 2823 X ISHARES A50*
308 CHINA TRAVEL HK 991 DATANG POWER 3323 CNBM
315 SMARTONE TELE 1038 CKI HOLDINGS 3328 BANKCOMM
330 ESPRIT HOLDINGS 1088 CHINA SHENHUA 3333 EVERGRANDE
358 JIANGXI COPPER 1109 CHINA RES LAND 3383 AGILE PROPERTY
363 SHANGHAI IND H 1114 BRILLIANCE CHI 3818 CHINA DONGXIANG
386 SINOPEC CORP 1171 YANZHOU COAL 3933 UNITED LAB
388 HKEX 1186 CHINA RAIL CONS 3968 CM BANK
390 CHINA RAILWAY 1199 COSCO PACIFIC 3988 BANK OF CHINA
546 FUFENG GROUP 1200 MIDLAND HOLDING 3993 CMOC
552 CHINACOMSERVICE 1211 BYD COMPANY 6030 CITIC SEC
590 LUK FOOK HOLD 1288 ABC
656 FOSUN INTL 1299 AIA
*Settle at RMB
A-Share ETF:
2822 CSOP A50 ETF 3188 CAM CSI300 *83188 CAM CSI300-R
2823 X ISHARES A50 *82822 CSOP A50 ETF-R    

Welcome to call us at 22776622, SBL Department for the short sell stocks

Designated Securities Eligible for Short Selling:
https://www.hkex.com.hk/eng/market/sec_tradinfo/ds20191209.htm
(The Company does not guarantee the accuracy of the data sources)

Stock Yield Enhancement Plan

 

 

Stock Yield Enhancement Plan

What is "Stock Yield Enhancement Plan"？

You can now participate in the Stock Yield Enhancement Plan, which allows Phillip Securities to borrow US stocks from your stock account and lend them to counterparties who wish to engage in short selling and are willing to pay borrowing interest. As a participant, you will receive collateral (in cash) and daily borrowing interest for the stocks lent out. The borrowing interest will be determined based on the prevailing market interest rates. During the borrowing period, you are free to trade the borrowed US stocks at any time without any restrictions.

Note: Phillip Securities will automatically borrow stocks from your account based on market demand without providing separate notification.

While Phillip borrows your stocks, the collateral we provide will be held in a third-party trust institution, and you will not be allowed to withdraw or transfer these funds at any time. It is only for safe keeping purpose, for more information please refer to the terms and conditions. You can also check the borrowing interest you receive on the daily statement.

Example:

Let's assume the closing price of ABC stock is $100, and you lend 5,000 shares of this stock. If Phillip receives borrowing interest from the counterparty at 10%, Phillip will pay you daily borrowing interest as follows: (100 * 5000 * 5%) / 360 = $69.

Note: The profits will be split 50% each between Phillip and the customer.

How to apply for or withdraw from the Stock Yield Enhancemen Plan?

Please contact your broker colleagues or call the Securities Borrowing and Short Selling Department at: 2277-6622.

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Client Agreement

Please press here to view the relevant agreements

Note: Stock Yield Enhancement Plan only provides electronic form of daily statement and monthly statement. For enquiry please contact your account executive or Phillip SBL department.

 Buy PUT derivative WarrantSBL – short sell
Liquidity Single liquidity provider/ AMS (Automatic Order Matching and Execution system) AMS (Automatic Order Matching and Execution system)
Bid-ask spread Determined by liquidity provider Usually has smaller spread size
Expiry Expiry date is determined by issuer No expiry date
Profit / Loss Factors involved stock price, volatility, outstanding quantity etc. Stock price
Stock Borrowing
  1. Open SBL account in Phillip Securities (HK) Ltd
  2. Call 2277 6622 to check whether Phillip has the stock that you want to short sell
Short Sell
  1. If we have the stock you want to short sell, you can place short sell order through our dealers.
  2. For example, successfully short sold 10 lots of Hang Seng Bank (00011.HK) with selling price $100.
  3. Client has to deposit $25,000 into securities account for collateral at T day (transaction day).
    ($100 x 10 lots x 100 shares per lot x 25% = $25,000)
  4. At T+2 day, Phillip transfers $125,000 from client’s stock account to SBL account.
    ($100,000 is principal of short sell)

Maintenance margin – example 1

  Maintenance margin: 115% of market value at the time
  If price of Hang Seng Bank (00011.HK) is $90
  Margin ratio = 138% 【125,000 / 90*1,000】
  No need to deposit for margin
  Moreover, client can withdraw part of collateral to stock account. Available amount is $12,500 【125,000-$90x1000x1.25】

Maintenance margin – example 2

  Maintenance margin: 115% of market value at the time
  If price of Hang Seng Bank rises to $110
  Margin ratio =114%【125,000 / (110*1000)】 < 115%
  Required to deposit
  Required to be deposited margin：$12,500 【1.25*(110*1000) - 125,000】
Stock Return
  1. Hang Seng Bank drops down to $92, client decides to buy back and return stock.
  2. Client can buy stock through online or your Account Executive normally. Inform us after buy back,
    otherwise the return process will not be handled.
  3. At T+2 day of buy back stock, Phillip return the $125,000 margin to client’s stock account, and withdraw the stock for return.
  4. Loan fee will be deducted from stock account at return day (T+2 of buy back).
ItemDescription of fees
Stock Borrowing & Lending
IRO Registration Fee HKD270 (Charge once only)
Loan Fee Depend on borrowing value and annual interest rate agreed. 
Minimum loan fee (Hong Kong Shares: HKD200, Shanghai-Hong Kong Stock Connect: CNY200)
Borrowing Value No minimum requirement (at least one lot)

Above charges are for reference only, there are subject to change without prior notice.

Trading：Online/Telephone

  1. Choosing stock for collateral, client still can’t withdraw the principal of short sell.
  2. If stock ex-dividends during stock borrowing, Phillip will deduct dividend from client’s stock account at book closed date.
  3. There has no time limit on stock borrowing, but Phillip has the right to request borrower to return stock in specific time.
  4. Clients with cash or margin account can open a SBL account.

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.

Example 1

You wrote a short call for HSBC Holdings(0005.hk). But finally, it was assigned. You can:

  1. Buy the stocks immediately for settlement.
  2. Borrow the stock for settlement and wait for a better price to buy back and return the stock (you must have stock borrowing and lending account)

Example 2

You bought a put for HSBC Holdings(0005.hk). But today is the expiry date of the option you can:

  1. Roll over the option to an other period.
  2. Exercise the contract and borrow the stock for settlement and wait for a better price to buy back and return the stock (you must have stock borrowing and lending account)
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Contact Us
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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