Asian trading venue the Singapore Exchange (SGX) is enhancing its securities borrowing and lending service, increasing the number of stocks available for lending from 150 to more than 600.
The change means that more than 80% of the stocks listed on the SGX Mainboard and small-business trading platform Catalist are now eligible for lending or borrowing via Singapore's Central Depositary (CDP), expanding the potential for investors to lend out their stocks while giving institutional borrowers wider choice.
“Many retail investors shares directly with the CDP,” said Lai Kok Leong, vice president, depositary services at SGX. “When these shares are pooled together, they form a substantial block which could be borrowed by institutional investors. By enhancing the service, retail depositors can gain a return on their stock holdings and access to institutional borrowers. With access to a large pool of stocks, institutional investors can consider new trading strategies. This will also improve overall liquidity of the stocks.”
The CDP will be the counterparty for all lenders and borrowers, providing a single point of processing for all activities including corporate actions as well as borrowing and lending of securities. Stock lending allows CDP account holders to lend out their shares to earn lending fees improving the total earnings on their assets.