Margin calls hit record highs

Record levels of margin calls have been made in the last two weeks and investors who have borrowed to purchase shares in companies exposed to global credit problems are being forced to settle their positions. BT Margin Lending, owned by Westpac, yesterday called in loans for Allco Finance Group and Centro Properties Group, but the lender said that there were not many single-stock loans for these companies so only a small number of investors were contacted. CommSec has said that it is calling in loans on stocks related to Allco, including the Allco Hybrid Investment Trust, Allco Equity Partners and Allco Max Securities and Mortgage Trust. St George is going to makes calls on loans with exposure to MFS, and will join Suncorp in reducing the approved loan-to-value ratios on Allco stocks.

Source: The Australian Financial Review