![]() ![]() However, if the price of underlying assets falls below the knock-in level, usually 50% of the price at the time of the ELS purchase, investors are asked to accept the entire losses incurred. 19, 2021.ĮLS are derivative products, the returns of which are determined based on the performance of underlying assets such as a stock index or individual shares.ĮLS investors are entitled to promised returns if the underlying asset’s price stays above a certain level, or knock-in level, until maturity, usually three years. The HSCEI has more than halved to 6,060.02 points as of Friday from a high of 12,106.77 on Feb. With little hope for a meaningful rebound in H-shares next year, South Korea’s retail investors, particularly those who have bought into equity-linked securities (ELS) tracking the HSCEI, or the Hang Seng China Enterprises Index, are facing collateral damage from its significant descent. Korean banks are exposed to the heavy decline in Chinese shares listed on the Hong Kong ExchangeĬhinese shares listed on the Hong Kong bourse have fallen sharply so far this year, placing the city’s main stock index, the HSCEI, among the world’s worst-performing gauges.
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