Making Use of Market Volatility
The Korea Exchange (KRX) announced on November 14 that it has signed a license agreement with European investment banks, BNP Paribas and Natixis, to use its two self-developed strategic derivative indexes optimized for equity linked securities (ELS).
These indexes adjust market volatility of the exchange’s main indexes – KOSPI 200 and KOSDAQ 150. The KRX developed the indexes to meet the investment demand seeking for profitability or stability by making use of market volatility
BNP Paribas and Natixis are planning to apply the indexes to structured financial items like ELS, and sell them to South Korean and foreign investors starting from the end of this month at the earliest.
The KRX said, “It is meaningful that we are expanding our index business to the global market by joining hands with global IBs, which have strong points in the structured financial products, and releasing financial derivatives through the development of indexes for investment.”
It also added, “As the strategy indexes using the KOSPI 200 and the KOSDAQ 150 are applied to structured products which are recently becoming more diverse, the application range of the main indexes is expected to expand further in the capital market in the future.”