Saxo launches margin financing accounts in Singapore
SINGAPORE, 9 DECEMBER - Saxo, a leading multi-asset investment platform, today announced the launch of margin financing (subsequently referred to as “margin lending”) accounts in Singapore. With this launch, clients can now manage their investments purchased via margin lending separately from the rest of their assets.
Alongside the launch of Margin Lending Accounts, Saxo is also introducing a series of enhancements.
- Improved Collateral Rates: Tiered collateral rates now offer more favourable leverage for stocks and ETFs rated between risk levels 2 to 5.
- Partial Stop-Outs: To help clients manage their risks more proportionately, Saxo has implemented partial stop-outs for its Margin Lending Accounts, replacing the previous full liquidation model.
Saxo first introduced margin lending in 2023. In response to feedback gathered from clients, we have implemented these enhancements to improve the overall margin lending experience.
Commenting on this, Mahesh Sethuraman, Singapore CEO at Saxo said: “This launch is a reflection of Saxo’s commitment to being a client-centric organisation. We are constantly listening to our clients and evolving our platform to deliver the best investing and trading experiences for our clients. The enhancements to our margin lending offering will provide greater flexibility, transparency, and strategic control, whether clients are looking to amplify their buying power or optimize dividend income. The team continues to charge forward, helping our clients not just be invested but to be invested with conviction and confidence.”
What is Margin Lending?
Margin financing, otherwise known as margin lending, is a financial service that allows investors to borrow money to invest in instruments such as stocks, ETFs, and bonds. The borrowed funds are secured against the value of the investor’s existing portfolio, which acts as collateral. While margin lending carries increased risks, it also allows you to invest more in trades you are confident in by boosting buying power and allowing you to supercharge your dividend yields.
For an example of how margin lending can improve dividend yields, see appendix A.
How it works?
When you enable “Margin Lending Account” on Saxo, a separate account called 'Margin Lending' is set up. Within this account, you can utilise a margin loan to support your trading of stocks, ETFs, bonds and stock options. You can also use a margin loan to support physical delivery of the underlying instruments upon option assignment.
Appendix A
Scenario A: Without margin lending Client has $5000 cash right now. He buys Stock A and receives 5.50% dividend. | Scenario B: Using margin lending Client takes a margin loan of $15,000 (max loan), to buy $20,000 worth of Stock A | |
Amount invested | $5,000 | $20,000 |
Dividend | $275.00 | $1100.00 |
Interest paid at 3.02%* | $0.00 | $453.00 |
Net Dividends | $275.00 | $647.00 |
Yield | 5.5% | 12.94% |
Today, Saxo is an international award-winning FinTech for investors, traders, and Institutional (BaaS) partners who are serious about making more of their money. As a well-capitalised and profitable FinTech, Saxo is a fully licensed Danish bank under the supervision of the Danish FSA and designated as a Systemically Important Financial Institution (SIFI) in Denmark. Saxo further holds a banking licence in Switzerland and financial licences in multiple jurisdictions, including Singapore where it holds a capital markets services licence under the Monetary Authority of Singapore (MAS). As one of the early fintechs in the world, Saxo continues to invest heavily into technology to ensure that Saxo’s clients and partners enjoy unparalleled client experience, broad access to global capital markets across asset classes on our industry-leading platforms. Saxo’s open banking technology (BaaS) powers more than 150 financial institutional partners, boosting the investment experience and the tools offered to end clients (B2B2C). Headquartered in Copenhagen and serving more than 1.7 million clients and over 400 partners in total, Saxo has recently reached new highs with client assets of more than DKK one trillion and more than DKK 5 billion in revenue. Saxo employs more than 2,400 professionals in financial centers around the world including London, Singapore, Amsterdam, Zurich, Dubai, and Tokyo.
For more information, please visit: https://www.home.saxo/en-sg
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