Societe Generale launches first Daily Leverage Certificates in Asia

Fixed leverage up to 5 times on key Asian indices

Societe Generale today announces the inaugural launch of 10 different Daily Leverage Certificates (DLCs) listed on the Singapore Exchange (SGX), the first bank to issue this category of product in Asia. A DLC is an exchange traded financial product that offers fixed daily leveraged exposure to an underlying asset, such as an index, allowing investors to trade and capture enhanced returns, both up and down, on short term market moves.

These DLCs will be the first leveraged products of their kind available in the region, offering investors fixed daily leveraged exposure to a number of key Asian indices which limits the risk of capital loss to their initial investment. Societe Generale’s DLCs will officially commence listing and trading on the SGX on 17 July 2017.

Designed for sophisticated retail investors who trade actively, Societe Generale’s DLCs allow investors to enhance their potential returns from the daily rise or fall of the underlying benchmark indices by multiplying the daily performance by a factor of three or five.

DLCs are designed to be traded predominantly on an intra-day basis, offering the flexibility to benefit from both rising and falling markets. Due to the daily compounding effect, DLCs are not designed to be held long-term. Investors need to be Specified Investment Products (SIP) qualified to invest in DLCs.

Societe Generale will provide real-time pricing of the DLCs on the SGX. They can be bought and sold by investors at any time during SGX market hours just like a share through a securities trading account with their brokers. DLCs address the need of Asian sophisticated investors for simple and transparent leveraged products, with easy access for active trading.

The first batch of DLCs issued will consist of 10 products, including Long and Short DLCs offering fixed leverage of three or five times the daily returns of three different underlying indices, including*:

  • MSCI Singapore
  • Hang Seng Index (HSI) and
  • Hang Seng China Enterprises Index (HSCEI)

*The underlying indices are respectively the Net Total Return version for Long DLCs and the Total Return version for Short DLCs. The term sheets with full details of the products, including the associated risk factors, are available on dlc.socgen.com

Keith Chan, Head of Cross Asset Listed Distribution at Societe Generale’s Global Markets in Asia Pacific, said: “Societe Generale is excited to be the first bank in Asia to bring DLCs to Singapore and the region. Since its emergence in 2012, DLCs have become the fastest growing listed products by volume in Europe and we see strong appetite for leveraged products from Asian investors. Our recognised leadership in equity derivatives and our solid experience with DLCs in Europe make us an ideal partner with SGX to introduce this new product to Singapore.”

Chew Sutat, Head of Equities and Fixed Income, SGX, said: “SGX is pleased that Societe Generale, one of the largest issuers of DLCs in Europe, has chosen Singapore as the first venue in Asia to launch DLCs, one of the fastest growing listed structured products in Europe since 2012. This first-of-its-kind offering in Asia will provide investors in the region an exchange-traded instrument to capture leveraged returns on daily market moves. We welcome and look forward to such offerings that meet the evolving needs of investors in Asia.”

In 2016, Societe Generale celebrated 30 years of expertise in derivatives. Its commitment to derivatives has been constant and consistent since 1986. It has launched close to 700 DLC products across nine countries in Europe covering multiple asset classes including major indices, single stocks, foreign exchanges and commodities. In Hong Kong, Societe Generale has developed a strong warrant franchise since 1996. Societe Generale is committed to educating investors as well as providing quality liquidity for all our listed products.