SINGAPORE - Societe Generale will be issuing six daily leverage certificates (DLCs), which will be listed on the Singapore Exchange (SGX) on Jan 24.
The six new DLCs offer seven times long or short exposure to the daily returns of the underlying indices, namely MSCI Singapore, Hang Seng Index (HSI) and Hang Seng China Enterprises Index (HSCEI).
Societe Generale's existing DLCs offer three times and five times leverage, long and short exposure, on the same indices.
DLCs are complex, high-risk financial products which give investors a leveraged return based on the daily performance of an underlying reference index or indices, like the MSCI Singapore. The leverage amplifies the movement of the reference index, thus giving investors outsized returns or losses. DLCs may be either "long" or "short", and allow investors to bet on both the rises and falls of the index or indices.
Singapore was Asia's first venue to offer trading in DLCs in July last year. The first batch of DLCs have since generated a total turnover of S$1.6 billion.
DLCs come without implied price volatility, time decay and margin calls, features impacting pricing for options, the Singapore Exchange said in a release. The Long and Short DLCs, designed to be traded predominantly on an intra-day basis, offer the flexibility to benefit from both rising and falling markets.
Luuk Strijers, head of products, equities and fixed income for the SGX, said: "DLCs remain one of the fastest growing type of listed structured products in Europe since 2012, and we are delighted to offer this product to investors in Singapore, where market interest for listed structured products continues to grow."
Keith Chan, head of cross asset listed distribution at Societe Generale's global markets( Asia-Pacific), said: "DLCs are proving to be an effective investment vehicle of growing popularity for investors looking to capture short-term market opportunities. Societe Generale is expanding its DLC product range in Singapore together with SGX to further meet the growing demand we've seen from Asia."