How to generate 16% annualised return when stocks are only up little
Keppel Corporation and Sembcorp Industries are great companies, currently at the trough of their business cycle. When the business cycle improves, they should be beneficiaries.
Bonus enhanced note is similar to fixed coupon note, except it has no knock out feature and coupon is flat (non annualised).
Risk of this note is converting to worst performing stock at strike price. This is good for investors who do not mind buying Keppel Corp (3.06% dividend yield) or Sembcorp Industries (2.63% dividend yield) at strike price.
The note has a flat coupon of 8.38% for 6 months, that would means 16.76% annualised return.
Investors will be entitled to the 8.38% coupon as long as both underlying stocks stay above entry level at the
valuation date (end of 6 months + 14 days).
If the performance of worst performing stock at valuation date is above the coupon rate, investors will be entitled to the performance of the worst performing stock.
Bonus Enhanced Note details:
Underlying: Keppel Corp + Sembcorp Industries
Tenor: 6 months
Strike: 98%
Digital strike: 100%
Coupon flat: 8.38%
Notional: SGD
Here are the various possible scenarios:
- Both underlying stocks are above entry price at the valuation date (end of 6 months + 14 days), investors will be entitled to flat coupon of 8.38%.
- Both underlying stocks trade below strike price at the valuation date, the note will be converting to worst performing stock at strike price.
- Both underlying stocks trade higher than 8.38% at the end of valuation date and worst performing stock is up 12%. Investor will be entitled to 12% return instead of 8.38% return.
- The note can be unwind before maturity. Unwind value subject to counterparty's discretion.
Equity structured product like this note is only available at private banks. Requirement to open a private account is SGD3mil.
Write email to us at metal.commodity@gmail.com if you are interested. We have friends to refer.
Bonus enhanced note is similar to fixed coupon note, except it has no knock out feature and coupon is flat (non annualised).
Risk of this note is converting to worst performing stock at strike price. This is good for investors who do not mind buying Keppel Corp (3.06% dividend yield) or Sembcorp Industries (2.63% dividend yield) at strike price.
The note has a flat coupon of 8.38% for 6 months, that would means 16.76% annualised return.
Investors will be entitled to the 8.38% coupon as long as both underlying stocks stay above entry level at the
valuation date (end of 6 months + 14 days).
If the performance of worst performing stock at valuation date is above the coupon rate, investors will be entitled to the performance of the worst performing stock.
Bonus Enhanced Note details:
Underlying: Keppel Corp + Sembcorp Industries
Tenor: 6 months
Strike: 98%
Digital strike: 100%
Coupon flat: 8.38%
Notional: SGD
Here are the various possible scenarios:
- Both underlying stocks are above entry price at the valuation date (end of 6 months + 14 days), investors will be entitled to flat coupon of 8.38%.
- Both underlying stocks trade below strike price at the valuation date, the note will be converting to worst performing stock at strike price.
- Both underlying stocks trade higher than 8.38% at the end of valuation date and worst performing stock is up 12%. Investor will be entitled to 12% return instead of 8.38% return.
- The note can be unwind before maturity. Unwind value subject to counterparty's discretion.
Chart from Bloomberg
Chart from Bloomberg
Equity structured product like this note is only available at private banks. Requirement to open a private account is SGD3mil.
Write email to us at metal.commodity@gmail.com if you are interested. We have friends to refer.
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