SEOUL, Sept. 15 (Yonhap) — The total amount of derivatives-tied securities issued in South Korea fell below the 100 trillion won (US$75.4 billion) mark in the first half of the year, despite the strong stock markets of major economies, data revealed Friday.
According to the Financial Supervisory Service (FSS), the value of equity-linked securities (ELS) and derivatives-linked securities (DLS) was 96.3 trillion won as of the end of June, a decrease of 5.9 trillion won from six months earlier.
The FSS said the number of redeemed securities products exceeded the number of newly issued ones in the first half due to the bullish stock markets compared to the same period last year, when stock markets were affected by the Russia-Ukraine war and interest rate hikes.
ELS and DLS are structured to track the performance of underlying assets but do not guarantee the principal amount, as investors prefer instruments that promise higher yields.
The outstanding value of ELS came to 66 trillion won as of the end of June, a drop of 0.8 trillion won from a year earlier. 25.3 trillion won worth of ELS products were redeemed in the first half, which was more than the 21.9 trillion won worth of new issuances.
ELS refers to hybrid debt securities whose returns are determined by the performance of benchmark stock indexes, such as the Korea Composite Stock Price Index (KOSPI) 200.
The value of outstanding DLS instruments, which track interest rates, currency values and other underlying assets, was 30.3 trillion won, up 2.3 trillion won from a year earlier, but down 1.2 trillion won from six months earlier.
A total of 9.3 trillion won worth of DLS products were issued in the first half, while a combined 10.2 trillion won worth of DLSs were redeemed.
The logo of the Financial Supervisory Service provided by the agency (PHOTO NOT FOR SALE) (Yonhap)
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