The Stock Exchange of Thailand revealed 4 advantages of publishing information on margin accounts as collateral for debt repayment on the SET website as information for investors to use in making decisions.
For the advantages that are published, the information on the collateral for debt repayment in the margin account on the SET website is beneficial, including:
Report the names of stocks that are placed as collateral in margin accounts with brokers in 36 Thai stock exchanges
The SEC is in the process of improving the related criteria to provide investors with information on placing stocks as collateral in addition to information on important transactions of listed companies and related executives that must be reported.
2. Indicate the number and percentage of shares placed as collateral
. Data is arranged in order of the number and percentage placed as collateral.
If a large number of shares are placed as collateral compared to the total number of shares, if the shares are Force Sold, it may cause
the share price to fluctuate greatly.
3. Tell the percentage of Free Float
If a large amount of stocks are used as collateral while the Free Float is low, if the stocks are Force Sold, it may cause the stock price to fluctuate a lot.
4. It is information used for investment decision making.
This type of account, simply put, is ‘have some money, borrow some to invest’ where investors must provide cash or assets as collateral for debt repayment before purchasing shares in the proportion set by the broker, for example, the proportion is set at 50% of the loan amount. Therefore, to purchase shares for 100 baht, investors pay 50 baht of their own money and use the broker’s money for another 50 baht, in which case investors must also pay interest on the loan.
A caution when choosing this type of account is that the loan amount may increase or decrease according to the price of the shares placed as collateral. If the price of the shares placed as collateral falls significantly until the margin rate is lower tha
n the specified criteria, the broker may force the customer to place collateral or call for additional cash, or may force a sale (Forced Sell) of the shares in order to maintain the margin rate within the specified criteria.
Trading in a margin account can only trade securities that the broker has specified to be traded through a margin account. Therefore, a margin account is suitable for investors with high investment experience, investment capability, and good debt repayment capability.
Source: Thai News Agency
