ELS Issuance
According to the Korea Securities Depository (KSD) on October 17, South Korea's issuance of equity-linked securities (ELS) stood at 18.12 trillion won (US$16.03 billion) in the third quarter this year due to a bullish global stock market, up 15.1 percent from the previous quarter.
By type, the issuance by public offering increased 22.7 percent to 13.93 trillion won (US$12.32 billion) compared to the previous quarter, accounting for 76.9 percent of the total, while that by private offering decreased 4.6 percent to 4.19 trillion won (US$3.7 billion), making up the remaining 23.1 percent.
An official from the KSD said, “The issuance of ELS grew due to the as the increase in issuers’ issuance capability and demand of investors’ reinvestment, boosted by the stable trend in the global market and the increase in call redemption. As Individual investors’ sentiment for ELS has also improved, the ratio of issuance by public offering has risen as well.”
By underlying asset, the ELS issuances based on the Euro Stoxx 50 index and KOSPI 200 index reached 13.2 trillion won (US$11.68 billion) and 10.75 trillion won (US$9.51 billion), respectively. The figures grew 20.7 percent and 24.8 percent, respectively from the previous quarter.
The issuance of ELS based on the Hong Kong Hang Seng Index (HSI) also showed a whopping 267 percent growth from the previous quarter to 8.2 trillion won (US$7.26 billion). On the other hand, the issuance of ELS based on the Hong Kong Hang Seng China Enterprises Index (HSCEI) stood at 3.43 trillion won (US$3.04 billion), down 47.5 percent over the same period.
The official from the KSD also added, “There is an increase in call redemption driven by the rise in mainly ELS issued based on the Euro Stoxx 50 index and KOSPI 200 index as underlying assets as well as the indexes.”