UBS has listed six new daily leverage certificates (DLCs) on the Singapore Exchange S68 (SGX) over single stock underlying assets.
This is the first time that a USD-quoted stock DLC is listed on the exchange.
There will be six long and short DLCs, which offer three times the daily performance of the single stocks, which are namely Tencent, Alibaba and Chinese manufacturer BYD.
DLCs are structured financial instruments that offer sophisticated investors a fixed daily leveraged exposure of up to seven times of the daily performance of an underlying asset, which can be either market indices or single stocks. They are also transparent instruments that allow investors to benefit from both bullish and bearish exposure over an underlying asset. DLCs were first introduced in Europe then introduced to Asia by SGX.
“UBS continues to be at the frontier of offering new and innovative products for our clients. With the launch of the first-ever USD quoted single stock DLCs, UBS together with SGX, is able to provide an option with less currency fluctuations and appeal to investors who prefer USD-traded instruments,” says Vassili Reperant, UBS head of public distribution APAC.
“The markets have experienced a lot of volatility in recent months. We have however seen a turnaround in investor sentiments for Chinese stocks and this is an opportune time to launch 3x DLCs on the underlying single stocks to appeal to investors who prefer smaller leverage factor for less volatility,” he adds.
UBS is the second largest issuer of DLCs on SGX, which currently has over 430 live DLCs listed.
