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Diversify your portfolio with Debt Securities Services, i.e. Bonds and Structured Notes.

           
                       
                                   
                                               
Important Note:                                                
                                               
Structured notes are structured products involving derivatives. The investment decision is yours but you should not purchase such products unless the intermediary who sells it to you has explained to you that the product is suitable for you in regards to your financial situation, investment experience and investment objectives                                                
                                   
                       
           

Debt Securities Services

Debt Securities may help you to generate steady income and achieve your investment goals.

Features

How does bond work?
For Illustrative Purposes Only
A client would like to invest in Bond A on 1st July 2017 with bond features as below:
Client Buying Price 102%
Face Value US$100,000
Coupon Rate / Payout Frequency / Payout Date 5% p.a. / Once a Year / 31 December
Bond Tenor / Bond Maturity Date 4.5 Years / 31 December 2021
Purchase of Bond
Client Buying Bond at Bond Price of 102% US$100,000 x 102% = US$102,000
6-month Accrued Interest Paid to Seller US$100,000 x 5%p.a. x 6 / 12 = US$2,500
Total Investment Amount Required US$102,000 + US$2,500

= US$104,500
Case 1: Holding the Bond until Maturity
Client will receive coupon interest every year until maturity (i.e. 5 coupon payments in total during 2017 – 2021) and the bond face value on the maturity date.
Coupon Payment Received US$$100,000 x 5%p.a. x 5 (i.e. 5 years)

= US$25,000
Bond Face Value upon Maturity US$100,000
Total Receivable US$25,000 + US$100,000 = US$125,000
Total Return US$125,000 – US$104,500
= US$20,500
Case 2: Sell the Bond on 1st Oct 2018 (i.e. 1.25 years later) at the Bond Price of 105%
Client will receive funds from selling the bond with bond price of 105% plus the accrued interest paid by buyer for holding the bond for 9 months after previous coupon payment on 31 December 2017.
Client Selling Bond at Bond Price of 105% US$100,000 x 105% = US$105,000
Coupon Payment Received by Client on 31 Dec 2017 US$100,000 x 5%p.a. = US$5,000
Accrued Interest Received from Buyer US$100,000 x 5%p.a. x 9 / 12 = US$3,750
Total Receivable US$105,000 + US$5,000 + US$3,750 = US$113,750
Total Return US$113,750 – US$104,500

= US$9,250
Case 3: Sell the Bond on 1st Oct 2018 (i.e. 1.25 years later) at the Bond Price of 94%
Client will receive funds from selling the bond with bond price of 94% plus the accrued interest paid by buyer for holding the bond for 9 months after previous coupon payment on 31 December 2017.
Client Selling Bond at Bond Price of 94% US$100,000 x 94% = US$94,000
Coupon Payment Received by Client on 31 Dec 2017 US$100,000 x 5%p.a. = US$5,000
Accrued Interest Received from Buyer US$100,000 x 5%p.a. x 9 /12 = US$3,750
Total Receivable US$94,000 + US$5,000 + US$3,750 = US$102,750
Total Return US$102,750 – US$104,500

= – US$1,750 (Loss)
What are structured notes?
UNDERLYING ASSET
CAPITAL PROTECTION LEVEL
INVESTMENT TENOR
  • Local & Global Equities
  • Commodities
  • Interest Rates
  • Currencies
  • Indices
  • Hybrid Assets
 &
  • 100% Principal Protected
  • Partially Principal Protected
  • Non-Principal Protected
 &
  • Short Term (from 1 month to 1 year)
  • Medium to Long Term (more than 1 year)
  • Early Redemption Feature
Fees and Charges
SERVICES
FEES
Purchase/sell transaction
(applicable to structured notes’ secondary market transaction only)		 0.75% of face value
for each transaction
Safe custody Free of charge
Interest collection Free of charge
Maturity redemption (cash) Free of charge
Maturity redemption (stock delivery) 0.25% settlement fee
Transfer in/out request HKD500 per request

The handling fees for purchase/sell transaction of debt securities (other than structured notes) may vary according to each issue.

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Half Year Outlook 2018

Stay bullish and diversified

Risk Disclosure Statement

  • The price of bonds/structured notes can and does fluctuate and the price of any individual bonds/structured notes may experience upward or downward movements and may even become valueless. There is an inherent risk that losses may be incurred rather than profits made as a result of trading bonds/structured notes. Independent assessment of the risk and appropriateness of the transaction in light of your own objectives and circumstances, including the possible risks and benefits of entering into such transaction, should be considered before entering into any transaction.
  • This information is based on, or derived from, information obtained from sources believed to be reliable. No representation or warranty is made or implied that it is accurate or complete. It is prepared solely for your reference and no responsibility is accepted for use of or reliance on this information. This information is neither a recommendation nor an offer or a solicitation of an offer to buy or sell any bonds/structured notes.

Note

This webpage does not constitute any offer, invitation or recommendation to any person to enter into any transaction described therein or any similar transaction, nor does it constitute any prediction of likely future price movements. Investor should not make investment decisions based on this webpage alone. This webpage has not been reviewed by the Securities and Futures Commission or any regulatory authority in Hong Kong.