Shin Geumtu: "100% Profit Repayment on No-Nakin Consortium ELS Over 8 Years"
A Complete Survey of 2,218 Index-Linked No-Stamp Public Offering ELS Sold Over 8 Years
[Asia Economy Reporter Minwoo Lee] Shinhan Financial Investment has fully repaid 100% of the index-linked No-Knock in public equity-linked securities (ELS) it directly sold over the past eight years.
On the 18th, Shinhan Financial Investment announced that it conducted a comprehensive analysis of 2,218 cases of index-linked No-Knock in public ELS worth a total of 4.4 trillion KRW sold through its own channels from 2012 to September 2019, confirming these results. It was explained that the performance was strong even during periods of index declines such as the UK's Brexit, the sharp stock market drop after the US presidential election, and the plunge of the Hong Kong Hang Seng Index.
A representative example cited was ELS No. 15180, which had the KOSPI 200, Euro Stoxx 50, and Hong Kong Hang Seng Index as underlying assets. This product was sold one week before the KOSPI index reached its peak of 2607.10 on January 29, 2018. Subsequently, the stock market fell by about 23 percentage points within the year, dropping to 1985, but the ELS met the early redemption condition for the fourth time in two years in January this year and was repaid with a 9% profit.
Shinhan Financial Investment explained that the key was a structure that increased the possibility of redemption. In 2016, it was the first in the industry to launch a super lizard structure ELS that provides two early exit opportunities. It also emphasized that 67.58% of the surveyed ELS were redeemed early within one year.
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Jang Jaewon, head of Shinhan Financial Investment's OTC department, said, "The driving force behind achieving zero losses was focusing on a structure that increases the possibility of redemption while pursuing an appropriate rate of return rather than simply maximizing returns." He pledged, "We will continue to do our best to provide products that protect customer assets and pursue stable profits so that not a single loss occurs."
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