Funding

Working in the securities market gives you new possibilities to receive additional financing. We offer you:

securities deals REPO and REVERSE REPO
securities purchase financing – margin trading

REPO deals
A REPO deal is one of the ways to receive additional financial means by selling securities to buy back after a definite period of time. We will guarantee your financing by buying the securities with a grant to be sold back to you after a definite period of time. In that way, you keep the securities as your property, and you can receive additional finances to optimise your cash flow and increase liquidity. You can also use REPO deals to increase the profitability of your investment package.

A REPO deal example*

You own Russian federal bonds with a nominal value of 1 million dollars, with a coupon – 3%, market value – 82%, cancellation terms 3 years and profitability before cancellation 10% per year. Assuming you managed to accumulate income before the bond cancellation, its annual profit is 100 000 USD. If you want to increase your investment in Russian federal bonds but you do not have the available finances you can use a REPO deal.
You can sell Russian federal bonds for the value of 500 000 USD with the agreement to buy them back in a year, paying for the service at 8% per year, or 540 000 USD (REPO deal expenses – 40 000 USD). Investing the 500 000 USD into the same Russian federal bonds with a profitability of 10% per year, you can buy bonds with a final nominal value of 609 000 USD (profit per year before cancellation – 10% or 60 900 USD). As a result you make a total profit of 20 900 USD (60 900 USD – 40 000 USD).

* all data used is fictional

REPO operations are profitable if the expected profit (10 % in the example) is higher than the REPO rate (8% in the example).

REVERSE REPO deals
A REVERSE REPO deal is very similar to the REPO deal, but gives you an opportunity to borrow securities from a bank with an agreement to buy them back. By selling the borrowed securities you can take a so-called “short” position, which enables you to profit even when market rates are falling. In this case you sell borrowed securities and buy them later at the lower market value. Your profit will come from the diversity of the prices against the bank commission.

Margin services
TKB margin services (security trade) allow you not only to buy and sell securities with the help of our brokers but also to receive additional financing for these operations. We offer you trade not only with Latvian shares and bonds, but also with the securities of foreign countries. By signing an agreement with the bank and making an initial deposit a loan will be given to you, guaranteed by securities. TKB brokers buy these securities.

List of financial instruments available for REPO and margin trade.

The loan interest rate can vary depending on your investment package structure, loan amount and agreement terms.

To start using broker services:

If you are already our client, you should
contact your Private Banker or call our Info Center on +371 67027777 or by e-mail info@tkb.lv ,
sign an Agreement on rendering investment services and auxiliary investment services

If you are not our client yet, you should
open an Current Account,
contact your Private Banker or call our Info Center on +371 67027777  or by e-mail info@tkb.lv ,
sign an Agreement on rendering investment services and auxiliary investment services