A week has passed since SGX lowered the lending and borrowing fee for Phase 2. Under the new structure: Lenders will get a fixed 70% of the borrowing fee, which is higher than the old 66.67% (4% lending fee) of the borrowing fee. (My own opinion: Yeah, that is only true for borrowing fee above 5.75%.) Guess what? The starting borrowing fee is 4% and if the equity is a Blue Chip, REIT or Business Trust, the borrowing fee is only 0.5%! Zzzz. So much for getting a higher lending fee....
Well, with the lowered borrowing fee, SGX expect there will be an uptick in borrowing rate. Guess what? There is no one who borrowed new shares from me. For my current shares that are on loan, they have either returned back to me or borrowed from me at a lower quantity. Looks like this new Phase 2 is not so effective after all.
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