Source: Finance Association
① Why do Hong Kong stocks continue to fall, raising concerns among South Korean investors? ② What is the sales scale of this product in Korea?
Recently, the Hong Kong stock market continued to decline. As of yesterday's closing,$Hang Seng Index (800000.HK)$The cumulative decline during the year was over 14%.$Hang Seng China Enterprises Index(Gross Total Return Index) (800172.HK)$The decline was also over 10%.
In fact, this decline in Hong Kong stocks has actually caused losses to Korean investors on the sidelines, which can be called “heavy.” According to relevant reports, as the Hong Kong market has continued to weaken for the past two years, and equity-linked securities (ELS) linked to the Hang Seng China Enterprise Index have also been affected, South Korean investors have suffered heavy losses, amounting to 3 trillion won (HK$217.5 billion).
In the case of ELS mentioned above, this product is a product where the underlying asset index or project usually maintains above a certain level until it expires for 3 years and pays an agreed yield to investors. However, if it falls below the “knocking barrier (knocking barrier)” of the base point where the loss occurred, a loss of principal will occur.
The scale of ELS products in Korea is close to HK$1.2 trillion
According to relevant statistics, data obtained by the Financial Supervisory Service shows that by the end of June, ELS products related to the Hang Seng Index sold domestically reached 20.5 trillion won (about 1.19 trillion Hong Kong dollars).
Of this amount, 15.67 trillion won (76.4%) was sold through banks. Kookmin Bank ranked first with 8.2 trillion won, followed by Shinhan Bank (2.37 trillion won), Nonghyup Bank (2.13 trillion won), Bank of Korea (2.12 trillion won), and Woori Bank (41.4 billion won).
Regulators have now begun on-site inspections of Kookmin Bank, the largest seller of such ELS products in the region, to see if they are selling this financial product to investors without fully explaining the potential risk of loss.
Furthermore, the South Korean regulator stated: “Until the first half of next year, if the Hang Seng Index rises again, investors will lose very little. The official inspection will be carried out in the first half of next year, when it actually expires.”
Editor/jayden