Calyon in Hong Kong has launched a China-themed retail equity-linked note featuring downside protection. "There's still a world fever on China-related stocks," said Dickson Cheung, managing director and head of equity derivative sales and marketing. He explained that while the French house has previously launched Chinese-related notes, this is the first time the firm has included protection, as clients want some certainty since volatility has picked up globally.
The note is linked to three H-shares including China Mobile and PetroChina. It may be redeemed for 100% of the principal if all the stocks fall by 10%. For every 5% level above the initial strike on quarterly observation dates, the investor receives a bonus step-up coupon, noted Cheung.
