CitisecOnline offers new trading facility to boost client base

Online tradingn firm CitisecOnline is hoping to increase its client base and accounts with its latest offering that allows investors to easily borrow funds using marginable stocks and cash balance as collateral.

CitisecOnline president Conrado Bate said this flexible credit facility called COL X2 effectively doubles an investor’s buying power and will be readily available at an interest rate of 1.5 percent per month or 18 percent per annum, lower than most traditional lending rates such as a personal loan or a credit card.

Marginable stocks are determined by the online brokerage house based on the company’s earnings track record, liquidity, and free float, among others.

Among the stocks that are eligible for margin are ABS-CBN Broadcasting Corp., Ayala Corp., Aboitiz Equity Ventures, Ayala Land, Banco de Oro, Benpres Holdings, Bank of the Philippine Islands, PNOC-EDC, Equitable PCI Bank, First Gen, Filinvest Land, Globe Telecom, Holcim Philippines, International Container Terminal Services Inc., Jollibee, JG Summit, Metrobank, Megaworld, Meralco, Manila Water, Petron, Piltel, Philex Mining, Robinsons Land, SM Investments, San Miguel, SM Prime Holdings, Philippine Long Distance Telephone Co., and Universal Robina Corp.

Bate said funding for this program will come from proceeds of a share sale in July last year amounting to nearly P150 million, and bank borrowings amounting to P200 million.

He said customers can readily borrow funds as long as the value of their stock equity or cash amounts to not less than P200,000.

CitisecOnline vice president Juannis Barredo said that should an account value fall below the requirement, the investor would need to deposit additional cash or marginable stocks or sell securities to cover the loan.

Barredo pointed out that investors should pay CitisecOnline the amount of money they borrowed on margin regardless of the underlying value of the stocks purchased. Also, he said investors should maintain a minimum amount of P50,000 equity in their account at all times.

Bate said anyone who avails of COL X2 can buy any stock listed in the PSE, including IPOs and can even use the money for any personal financial need without a separate application.

Once approved, the margin facility will be made available within 24 hours.

Online stockbrokers have been looking for ways to improve their services to remain competitive in the industry.

CitisecOnline has been actively trading in the Philippine Stock Exchange since 1999. It launched its online trading services in 2005. It has a paid-up capital of over P300 million.

Online participation in the stock market through CitisecOnline requires an initial investment of P25,000. Interested investors may avail of a seven-day trial period, which allows them to use the features of the site including comprehensive research, off-hours order placement, a stock watchlist and alerts.

The company owns CitisecOnline.com Hong Kong Ltd, a member of the Hong Kong Stock Exchange, which is currently developing an online platform for the Hong Kong and China markets.