Margin calls made on ‘risky’ shares

Investors who have used margin loan facilities to buy stocks that are now seen as risky are being hit with orders to settle their loans. Stocks such as Allco Finance Group, Centro Properties Group, MFS and RAMS Home Loans have been deemed too risky by margin lenders such as CommSec and Adelaide Bank. They are taking measures to reduce their exposure to these companies by capping the amount that can be invested in them, reducing the ratio of the purchase that they will cover, or pulling out of them entirely. Investors will have to adjust their share portfolios by paying cash, selling stocks or using personal assets to settle their position.

Source: The Australian Financial Review