South Korea’s equity-linked securities (ELS) market slowed down during the July to September period this year due to the tepid demand caused by poor performance of stock markets across the globe.
According to Korea Securities Depository on Wednesday, the issuance of ELS during the third quarter totaled 14.27 trillion won ($1.27 billion), down 42.2 percent from the previous quarter. Public offering dropped 43.7 percent to 11.66 trillion won and private offering fell 34.4 percent to 2.65 trillion won.
Issues that track Euro Stoxx 50 as one of the underlying assets amounted to the largest 10.31 trillion won. The U.S. S&P500 came in second at 8.83 trillion won, followed by Hong Kong’s Hang Seng China Enterprise Index (HSCEI) at 8.42 trillion won and Korea’s Kospi200 at 5.34 trillion won.
Mirae Asset Daewoo issued the largest volume of ELS products at 1.81 trillion won, trailed by KB Securities at 1.72 trillion won, Meritz Securities at 1.558 trillion won, Samsung Securities at 1.551 trillion won and NH Investment & Securities at 1.4 trillion won. The five brokerages accounted for 56.7 percent of total ELS issuance.
Redemption dropped 50.7 percent to 10.14 trillion won as some ELS products couldn’t meet the conditions for early redemption amid sluggish performance of the major stock bourses, market experts suggested.
As of the end of September, the outstanding volume of ELS products rose 6.4 percent on quarter to 67.93 trillion won.
By Park Joon-hyung and Choi Mira
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]