Freedom Holding Corp (FRHC)

[HMB2010]

Freedom Finance has launched a new service for customers
11/05/2017 15:00 1084 0

Investment company "Freedom Finance" has launched a new service for its customers - "repo netting" or "transfer of uncovered positions." It sounds complicated, but it is actually quite simple. The customer will be able to buy more shares than they can afford at the moment and therefore capitalize on this.

However, this is only possible with the securities are traded on the stock exchange mode T + 2.

What is the mode of T + 2?

This is a mode in which an investor can make a deal today, and for her calculations are actually 2 days. However, as with any transaction, an investor should confirm its intention to buy, that is, to make a prepayment.

Prior to May 2017 in the amount of prepayment of "Freedom Finance" was 100%. Now, the company has reduced it to 50% of the value of the security.


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Here is an example for illustrative purposes: the investor on account of 100 thousand tenge and he wants to buy the paper on all this money.. If the paper is worth 1000 tenge, before to buy it, it was necessary to provide 100% of the funds, that is, all 1 000 tenge per share and get your 100 shares. Now, the investor will be able to buy paper for 500 tenge (for prepayment of 50%). Accordingly, instead of 100 shares, he will be able to buy just 200 shares.

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However, after an investor bought 200 shares, will he need 2 days to make the remaining 50% of the payment amount of the transaction. In the above example - it is 100 m or thousand investor can use the new service -. Uncovered transfer position (with the use of a specialized operation "repo netting").

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The essence of the new tool is that the investor can transfer their calculations on the transaction for another day, that is, an investor like taking the money borrowed, and "Freedom Finance" until settlement will receive a portion of the securities to which it is.

What is usability?

In the case of service activation client does not need to submit additional orders, call an investment adviser / trader to transfer position.

After the service everything will happen automatically every day to the closing of the trading session on KASE (approximately 17:00), the investor's position will automatically be transferred to the next day.

Closing transfer position is also carried out automatically if it is made at the expense of money in sufficient quantities, shopping Tradernet terminal automatically incorporate them and close the transaction (alternatively - you can sell the securities at the required amount, and when the receipt of money, the transfer will be closed). Thus, the main advantage of the services are simplicity, usability, and automatic provisioning.

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Service cost

"Freedom Finance" commission for the service is 0.02% by volume of the opening operation for each day (at least 10 tenge). Further, as for the standard repos, there is market fund-raising rate that is used to cover the uncovered position. This rate depends on the market conditions. To date, this rate ranges from 12% to 15% (about 0.04% -0.06% per day). In the case of the example with 100 thousand tenge -. It is about 40 tenge per day.

What gives?

On all stock exchanges of the world there are modes of "T + 2", "T + 3", "T + 4" when the deal is today, and for her settled within 2-3 days - it allows investors to greatly increase the speed with which they own .

If the investor has concluded a deal today, I saw that the next day the paper grew, he it was immediately sold. For larger volumes, is the difference that it appears, it becomes much more.

Again we use the above example, and calculate that with 50% prepayment instead of 100 shares, the investor buys 200 shares, which cost 1000 tenge. If after 2-3 days the action will jump by 5-10%, the investor will earn 10,000 - 20,000 tenge (although without the "repo netting" it would have earned 5 000 - 10 000 tenge). The commission will be about 60 tenge per day (20 tenge - broker commission and 40 tenge - borrowed funds Commission repos).

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For comparison - the transfer fee from card to card in Internet banking is usually not less than 500 m.

As an example, take a small amount, but if the investor sells 1 mln and above, the margin is also becoming more significant.

service Features

Use the advance payment of 50% is possible only when connected services uncovered position transfer. This can be done in the terminal tradernet.kz in the user's office. And you can connect only once and only to use or not use in a given transaction. The Commission will be charged automatically. The service is provided every day, 1 time at the end of the trading day with a lack of funds on the Client's account.

Service trading mode in T + 0 is unavailable. Use the service to transfer an uncovered position can only mode of trading on T + 2 for certain stocks, and this is just the most liquid instruments.

At the moment, their 13 pieces - it stocks "Basta" (ticker - BAST), «Halyk Bank of Kazakhstan» (HSBK), «Kazkommertsbank» (KKGB), «KMG" KazMunaiGas "(simple RDGZ and privileged - RDGZp),« BankCenterCredit »(CCBN),« Kcell » (KCEL),« KazakhTelecom »(KZTK),« KEGOK »(KEGC),« KTO »(KZTO),« Savings »(RU_SBER),« Kazminerals »(GB_KZMS),« Bank of America »( US _ BAC _ ).







tags: # Freedom Finance # By Freedom Finance # FFin # investments # T + 2 # repo


https://www.kursiv.kz/news/finansy/fridom-finans-zapuskaet-novuu-uslugu-dla-klientov/