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Sales of derivatives-tied securities fall 32.6% in H1 on virus fallout

(Yonhap)
(Yonhap)
South Korea's sales of derivatives-linked securities fell 32.6 percent on-year in the first half of the year due to sharp declines in stock markets in major countries amid the coronavirus pandemic, data showed Tuesday.

The combined value of equity-linked securities (ELS) and derivatives-linked securities (DLS) issued in the January-June period came to 42.1 trillion won ($36 billion), down 20.4 trillion won from a year ago, 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 stood at 31.6 trillion won in the first half, down 16 trillion won from a year ago.

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 10.5 trillion won in the first half, down 4.4 trillion won from a year ago. (Yonhap)

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