Friday, 8 March 2019

SGX Securities Borrowing and Lending Programme

It seems like a long time since I signed up for SGX securities borrowing and lending programme (SBL).

In fact I have forgotten about this until today when I realised $4.94 was credited to my bank account.

Upon checking my CDP statement, I found out that 11,000 of my M1 shares were borrowed (on loan) for 2 days last month.

In the probably 2 years since I signed up, this is the first time my shares got borrowed.. Haha

And of all shares, M1? This is some logic that I don't understand. Perhaps this is why I remained as an average retail investor.

As I can't find any formula online on the expected returns for borrowed securities, I decided to do a back-of-the-envelope calculation myself.

Calculations

No. of Shares On Loan: 11,000
Closing Price of Share While On Loan: $2.05 & $2.06
No. of Days On Loan: 2
Returns: 4% (this information is available online)

11,000 shares x $2.05 × 4% / 365 days x 2 days = $4.94

Please feel free to correct me if this formula is incorrect.

It's nice to have some additional lunch money sometimes.

Till next time.

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