Lift Capital - Another Opes disaster?

[TheAbyss]

"Merrill Lynch has done it again.

At least one other high-risk margin lender, backed by Merrill, has got the wobbles and is attracting some scrutiny from the regulators amid the fallout from the Opes Prime debacle.

This time, it is Sydney-based Lift Capital.

Like Opes, Lift lends money to clients to buy speculative stocks outside the ASX Top 300. It also encourages clients to borrow against their property to buy shares"

So another raft of stocks look like being dumped onto the market. How do we ascertain the + 5% holdings at risk earlier than we found out with Opes?

Full article here - http://business.theage.com.au/another-lender-in-peril/20080410-252j.html

"Not as risky perhaps as a source said its exposure to Lift was $650 million on stocks loans of $800 million.

Although the ''approved securities list'' on the Lift website shows ASX Top 400 stocks - less risky (at least on the website) than the Opes list - "

And who is next after Lift Capital you ask?

"It is believed the regulators are now investigating any margin lender that uses this high-risk model.

Melbourne-based Chimaera Capital is another.

Chimaera lends on just about any stock in the All Ordinaries index and lends stock out for shorting as well."

 

[YOUNG_TRADER]

Hey Abyss

Here's the list I found

http://www.liftcapital.com.au/pdf/LIFT_Accept_ASX_Securities.pdf

 

[rub92me]

Oh dear, some real dodgy stocks on that list, like ANZ, MQG :

 

[metric]

lift capital partners placed in admin

this story was just on sky news and supposed to be breaking news........

seems i should get my news here! you blokes knew yesterday!

 

[gfresh]

Like Opes, Lift lends money to over speculative stocks

If that list you posted YT is correct, the above sentence in the original article is a load of codswallop..

But they are in administration apparently as of today.. yesterday I suppose it 'looked' like they were about to go into administration..

http://www.businessspectator.com.au...Partners-in-administration-DKVMX?OpenDocument

The Sydney Morning Herald has reported that, prior to the collapse, there is no suggestion of irregularities but that firm may have to sell off its loan book to remain solvent.

Here we go again! I'm not sure how large these guys are, less so than Opes?

 

[mrgroundwork]

this is breaking news to the public yesterday...

however, broking houses around Australia have known about it since the start of the week... Lift capital could not guarantee to other borkers that it could settle trades and thus a lot of borkers have refused to deal with them this week...

please also beware of http://www.chimaeracapital.com/ , they are in the same position as lift, unable to guarnatee settlements...

 

[Rainmaker2000]

I'm guessing that's just a little problem, you know, in being a margin lender who can't guarantee settlements!!!!!!!!!

Looks like Gatto has some more work to do when he gets back to Melbourne

 

[Blank1979]

Oh dear.

Lift Capital have gone down this morning.

Here's Business Spectator's take on it:
http://www.businessspectator.com.au...Partners-in-administration-DKVMX?OpenDocument

It should be interesting seeing who's going to be next. I don't know if Chimera are next though. It'll be interesting whatever happens.

ASIC and APRA have to start regulating this better.

 

[refined silver]

Hey Abyss

Here's the list I found

http://www.liftcapital.com.au/pdf/LIFT_Accept_ASX_Securities.pdf

Thanks for list!

Most of mine are too illiquid even to make it onto that list! Who says big is safer??

 

[remus]

As an adviser with a large LIFT capital loan book, I have had a conversation with a LIFT exec today that conveyed that Merrill's were happy for an orderly unwinding of the loan book 2 days ago, but when the Michael West article appeared they turned the screws.

The thoughtless (risky security list, it is no different from any other lenders security list) reporting of West has potentially contributed to losses for my clients and business. I note with interest his initial article yesterday was significantly toned down today.

 

[mrgroundwork]

this is breaking news to the public yesterday...

however, broking houses around Australia have known about it since the start of the week... Lift capital could not guarantee to other borkers that it could settle trades and thus a lot of borkers have refused to deal with them this week...

please also beware of http://www.chimaeracapital.com/ , they are in the same position as lift, unable to guarnatee settlements...

WHAT DID I SAY ABOUT CHIMAERA? yep...

I'll let you know the next one before everyone else finds out too...

 

[Rainmaker2000]

Remus......I must agree looking at the list, a lot of small stocks with lvr on Comsec list are not even on Lift list, so it's not a terribly 'risky' list...........I sympothise to an extent than the panic and reporting of current market is unravelling many perfectly good small company stock prices

I would imagine as an advisor that you would have prepared your clients for such events and sitting for the long haul, current irrational trading will not affect long term outperformance.......or this may not be the case?.....

Either way, the days of cheap margin lending is over........I pay 10.3% now at Comsec, and I'm very happy too, knowing that I at least have title over my shares for example

 

[shadow123]

Any new updates on Chimaera Capital ?

Anyone heard anything about 'Associated Equities'?

Whispers has it they are tied up together aswell as /asia pacific is in the mix (aas).