Margin trade ban won't harm market
Margin trade ban won't harm market
The circular that puts a stop to foreign investors' margin trading from July 1 would not affect capital flow in the local market, said securities experts.
The Article 9, section 4 of the Circular No 203/2015 / TT-BTC that guides the listing on the stock market regulated that foreign investors were not allowed to perform margin trading.
So far, some securities companies have announced that they would stop opening new margin trading accounts for foreign investors and for the ones who already had margin trading accounts, they would lock the purchasing side and keep the selling side so that foreign investors could sell their stocks to pay the debts. They also stopped new disbursement for such accounts.
According to local data, at the end of first quarter, local margin lending in 12 securities companies with the biggest margin in the market reached VND21 trillion (US$954.5 million) , an increase of 61 per cent over last term. The two biggest margin providers distributed one third of the margin in the market. Of the two, Sai Gon Securities Inc (SSI) provided over VND3.77 trillion, an increase of VND1.5 trillion over the same period last year while HCM City Securities Corporation (HSC) provided VND2.35 trillion, an increase of over VND1.2 trillion from its last term.
While SSI still had no answer about the impact of the margin cut for foreign investors, Bao Viet Securities Company, which provided VND986 billion of margin to the market said it did not process any foreign margin trading so the regulation would not make any changes to company operation.
A representative of the securities company said the cut would not apply for all foreigners.
