Loan/s against shares by brokers

[waikare]

Can anybody tell me if there are any online brokers that will advance you funds against shares (NZ) that you intend to purchase. If so I have a couple of question to start with: who holds / owns the share, who's name are they registered in, what are the interest rates, is there a minimum loan period, can you sell them then repay the loan or are required to pay the load back first, who receives the dividends? If you can answer any of the questions or supply any other information that may be relevant, would be great.
I currently use Direct Broking.

[shasta]

Can anybody tell me if there are any online brokers that will advance you funds against shares (NZ) that you intend to purchase. If so I have a couple of question to start with: who holds / owns the share, who's name are they registered in, what are the interest rates, is there a minimum loan period, can you sell them then repay the loan or are required to pay the load back first, who receives the dividends? If you can answer any of the questions or supply any other information that may be relevant, would be great.
I currently use Direct Broking.

You are talking about margin lending, most brokers offer this service.

1. You own the shares, but the broker owns the debt against them & holds the shares in a nominee a/c.

2. Interest rates are variable, at the moment they are quite good.

3. No minimum loan so long as you dont fall into a margin call

4. You receive all dividends etc

It works like this...

Say you have either $2,000* or $2,000** worth of TEL shares...

ASB Sec would loan you 70% against your TEL shares...

This means you could buy another $2,000 worth of TEL shares & only have to contribute 30% or $600.

*Telecom shares $2,000
Loan $1,400
Your Equity $600, & still have $1400 cash left to use elsewhere

**Using your TEL shares as equity...

$2000/.3 = $6666 you could use to purchase more stocks...

XXX Shares $6666
Loan $4666
Equity $2000

Trick is not to use all the leverage available as a falling Share price magnifies the loss...

If you have your margin lending a/c in credit you will earn interest, & it's always a good idea to regularly top up the a/c.

The Direct Broking site should have some guff on margin lending

Good luck

[Steve]

While not an online broker, Fulcrum Securities used to offer margin lending...

[Dr_Who]

Just becareful out there, especially if you are a novice to the equities market.

I wouldnt advice a novice to leverage.

[JulianG]

Hi Waikare
We don't offer margin lending.Leveraged Equities do though. You should contact them.
Julian

[STRAT]

Just becareful out there, especially if you are a novice to the equities market.

I wouldnt advice a novice to leverage.

I second that Doc. I wont be considering such action for at least another 150 years

[shasta]

I second that Doc. I wont be considering such action for at least another 150 years

Oh c'mon leverage, derivatives, margin lending, shorting are all tools for investing...

Coming from someone who trades in options