Muscat Capital offers its clientele Margin Lending Services that are based on a client’s portfolio value. Through this service, Muscat Capital provides Margin Loans which allow clients to borrow funds to invest in shares, managed funds and other approved financial products as per CMA regulations in the Kingdom.
Using a margin loan, a client is able to amplify his/her investing power, which can be an effective way to building wealth and diversifying a portfolio of securities. However, Muscat Capital also highlights to all clients that margin loans can also amplify losses as well. As such, we assist our clients in weighing both the benefits and the risks when thinking about investing using margin loans. However, just as it has the potential to grow your wealth, if stocks go down in value your losses will be amplified as well. We therefore work with our clients to weigh up both the benefits and the risks when thinking about investing using margin loans.
A margin loan works by using a client’s portfolio of shares, managed funds and cash as a form of security, whereby such assets are used to calculate a Loan to Value Ratio (LVR), and which determines how much a client can borrow from Muscat Capital. Once a borrowing limit is established, a client can use available funds to purchase additional approved securities instruments after which the new and existing investments are combined to form a total portfolio.