Sales of derivatives-linked securities fall over 42 pct in H1

Sales of derivatives-linked securities in South Korea dropped sharply in the first half of the year, data showed Friday, following massive losses from derivative products tracking Chinese stocks. The combined value of equity-linked securities (ELS) and derivative-linked securities (DLS) issued in the January-June period came to 27.5 trillion won (US$20.7 billion), down 20.2 trillion won, or 42.3 percent, from six months earlier, according to the data from the Financial Supervisory Service (FSS). The reading also marks an 11.8 percent decline from 31.2 trillion won issued over the same period last year. The sharp decline comes after local brokerages and banks were told in March to compensate their customers for incomplete sales of ELS products tracking Chinese stocks listed on Hong Kong's H-index. ELS refers to hybrid debt securities, whose returns are determined by the performance of underlying equities. ELS products track benchmark stock indexes, including the Korea Composite Stock Price Index 200. Sal es of ELS products in the first six months of the year came to 18.3 trillion won, down 55.3 percent from 40.9 trillion won issued in the second half of 2023, the data showed. The value of outstanding ELS products stood at 80.5 trillion won as of end-June, down 13.8 trillion won from six months earlier. Source: Yonhap News Agency