Equity-linked securities (ELS) issuance and redemption in South Korea surged in the third quarter due to bullish stock markets at home and abroad, financial watchdog data showed Tuesday.
The ELS issuance was 18.1 trillion won (16.6 billion U.S. dollars) in the July-September quarter, up 15.3 percent from the previous quarter, according to the Financial Supervisory Service (FSS). It was up 64.5 percent from a year earlier.
The ELS refers to hybrid debt securities having stock-related indices as underlying assets. If a stock index reaches a preconditioned level, a certain amount of returns would be redeemed to holders.
The issuance of the index-type ELS, which have stock index as underlying asset, was 17.4 trillion won (16 billion U.S. dollars) in the September quarter, accounting for over 96 percent of the total issuance.
South Korea's KOSPI 200 index, Hong Kong's Hang Seng index and other European stock indices were used as key underlying assets for the ELS issuance.
The increased ELS issuance was attributed to the bull run of stock markets at home and abroad, and reinvestment of early redeemed returns into the newly issued ELS.
Amidst the bullish stock market, early ELS redemption amounted to 24.8 trillion won (22.8 billion U.S. dollars) in the third quarter, up 62.1 percent from the previous quarter.
The ELS issuance was 18.1 trillion won (16.6 billion U.S. dollars) in the July-September quarter, up 15.3 percent from the previous quarter, according to the Financial Supervisory Service (FSS). It was up 64.5 percent from a year earlier.
The ELS refers to hybrid debt securities having stock-related indices as underlying assets. If a stock index reaches a preconditioned level, a certain amount of returns would be redeemed to holders.
The issuance of the index-type ELS, which have stock index as underlying asset, was 17.4 trillion won (16 billion U.S. dollars) in the September quarter, accounting for over 96 percent of the total issuance.
South Korea's KOSPI 200 index, Hong Kong's Hang Seng index and other European stock indices were used as key underlying assets for the ELS issuance.
The increased ELS issuance was attributed to the bull run of stock markets at home and abroad, and reinvestment of early redeemed returns into the newly issued ELS.
Amidst the bullish stock market, early ELS redemption amounted to 24.8 trillion won (22.8 billion U.S. dollars) in the third quarter, up 62.1 percent from the previous quarter.
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