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Sales of derivative-tied securities edge up in Q1

All News 12:00 July 01, 2020

SEOUL, July 1 (Yonhap) -- South Korea's sales of derivative-linked securities edged up in the first quarter of this year from a year earlier, data showed Wednesday.

The combined value of equity-linked securities (ELS) and derivative-linked securities (DLS) issued in the January-March period came to 26.3 trillion won (US$21.9 billion won), compared with 26.1 trillion won in the same period last year, 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.

The issuance of ELS products rose 6.1 percent on year to 21 trillion won in the first quarter.

The Financial Supervisory Service's headquarters in Yeouido, western Seoul (Yonhap)

ELS refer 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, dropped 15.9 percent on year to 5.3 trillion won in the first quarter.

The outstanding value of ELS products reached 72.2 trillion won as of the end of March, down 3 percent from a year ago, with the amount for DLS vehicles falling 14 percent to 33.8 trillion won.


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