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Sales of derivatives-tied securities hit record high in 2019

All News 06:00 April 27, 2020

SEOUL, April 27 (Yonhap) -- Sales of derivatives-linked securities in South Korea hit a record high last year amid low interest rates and a steady rise in global stock markets, data showed Monday.

The combined value of equity-linked securities (ELS) and derivatives-linked securities (DLS) issued in 2019 came to a record 129 trillion won (US$104.5 billion), up 11.3 percent from 2018, according to the data from the Financial Supervisory Service.

The products are structured to track the performance of underlying assets, not guarantee the principle, as investors prefer instruments that promise higher yields.

Sales of derivatives-tied securities hit record high in 2019 - 1

The issuance of ELS products hit a record high of 99.9 trillion won last year amid bull run on global stock markets.

ELS refers to hybrid debt securities whose returns are determined by the performance of underlying equities. ELS products track benchmark stock indexes, including the Korea Composite Stock Price Index (KOSPI) 200.

Sales of DLS instruments, which track interest rates, currency values and other underlying assets, came to 29.1 trillion won in 2019, compared with 29.2 trillion won in 2018, according to the data.


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