Short Selling and Sec Lending in Singapore

SHORT SELLING AND SEC LENDING IN SINGAPORE

While limited short selling is done in Singapore, it is actually not that expensive (but still quite risky). In the current volatile market conditions, investors may want to trade on the downside by selling securities based on expected price decline. This is possible, even if you do not own the shares, by short selling. You can borrow the shares in the Securities Borrowing and Lending (SBL) market (on the margin), sell them in the market, and buy them back later. Hopefully (but of course nothing is guaranteed) you can profit as the price decline and you can buy back the same shares cheaper than what you sold them for. However, before you embark on large scale short selling talk with brokers or get details from the transactions from your financial institutions. Among others, Phillip Securities provides an informative overview of their securities borrowing and lending (SBL) facilities. http://www.phillipsbl.com/pages/view/securities_lending_and_borrowing_faq

Or read an introductory guide from the Bank of England on SBL: http://www.bankofengland.co.uk/markets/Documents/gilts/sl_intro_green_9_10.pdf