Margin lending race with reduced interest rates and promotions

From September 1 to November 30, SSI Securities Company announced the implementation of the program "Margin Interest Refund" and "M9 - Margin Power: The more you 'borrow', the more "Lovely" the interest rate. Accordingly, the margin loan interest rate is applied from 9 - 11%/year for customers with an average monthly debt balance of 3 billion VND or more.

In addition, SSI also applies a margin interest refund policy of up to 30%. Specifically, customers with an average debt balance of 100 million VND to less than 500 million VND in a month will be refunded 300,000 VND; average debt balance from 500 million VND to less than 1 billion VND will be refunded 500,000 VND... According to the broker's explanation, for example, customers using margin worth from 30 million VND to 499 million VND will be refunded a maximum of 300,000 VND, equivalent to enjoying the lowest margin interest rate of 9.5 - 9.9%, while SSI's current lending interest rate is 13.5%.

Many securities companies reduce interest rates and promote margin loans.

Or Techcombank Securities Company (TCBS) on September 1 also announced a change in margin lending interest rates applicable to all general customers. Accordingly, the T3 flexible loan package has an interest rate of 3%/year for the first 3 days and then 18.25%/year (equivalent to 0.05%/day). For the T5 flexible loan package, the interest rate is 10%/year. Previously, TCBS reduced the general margin lending interest rate from 13.7%/year to 12.99%/year. Or the company also launched a promotion program "Preferential loans, gratitude interest" with an interest rate of only 9.9%/year from the beginning of August and lasting until October 6...

Meanwhile, ACBS Securities Company applies a 7-day interest-free margin program. After this period, customers will have to pay 15% interest per year. For the T14 margin program, in the first 14 days, customers only pay 8% interest per year and from the 15th day onwards, the interest rate of 15% per year will apply...

According to securities companies and experts, the decrease in interest rates is an important factor promoting the financial services industry, including securities. Many investors have transferred capital from banking channels to other investment channels, but securities are the most attractive. At the same time, the margin lending interest rate has also decreased, stimulating the demand for loans to increase investment.

According to a report by VnDirect Securities Company, by the end of the second quarter of 2023, the amount of margin loans at securities companies was at VND140,000 billion. The ratio of industry margin loans to the total value of listed assets in the past 3 years has often been around 17 to 20%, the analysis team expects total margin loans in the whole market to reach VND155,000 - 180,000 billion in the second half of 2023, an increase of 10 - 30% compared to the end of the second quarter of 2023. With the total equity of 30 companies reaching nearly VND183,000 billion by the end of the second quarter of 2023, this figure shows that the ratio of margin loans/equity of the whole industry will fall to around 0.85 - 1 times.

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