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Derivatives

Bank of China Readies ELN Launch

Bank of China International is preparing to launch a retail equity-linked note in Hong Kong that embeds barrier options.

Bank of China International is preparing to launch a retail equity-linked note in Hong Kong that embeds barrier options. "We've had a lot of good feedback from distributors and it seems this type of product is still attractive," said Warren Kwan, head of equity derivatives in Hong Kong. The two-year instrument will contain a worst-of feature referenced to a basket of six domestic blue chips.

The ELN is the fourth in the bank's Flexibond program, but, "We're calling it Flexibond #5 because four is an unlucky number here," explained Kwan. Bank of China expects similar commitments to its recent offering, which raked in more than USD50 million.

Worst-of structures have proved popular among retail investors in Hong Kong due to the higher gearing, low cost structure and positive economic outlook. The French house Calyon also recently began offering these instruments (DW, 9/20).

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