ING Financial Markets began marketing its second equity-linked note to retail investors in Hong Kong last week, after making its debut in this hotly-contested market early this year (DW, 1/24). Dubbed the ING Lion ELN Series II, the two-year worst-of structure is linked to five blue-chip shares in the property and financial sectors, including Cheung Kong Holdings and HSBC. Edwin Bernard, Asian head of equity derivative product sales in Hong Kong, said, "This is a more defensive product as the overall market is trading in a range without a clear direction." He added, "We still see strength in these two sectors, particularly for a two-year outlook."
The note, which will close in mid-May, delivers shares of the worst-performing stock if a strike level expected to be set at 92% of the initial value is hit. A minimum coupon of 5.5% will be paid annually, with a maximum upside potential of around 40% for the total two-year life. "This product is a great way to pick up yield in the current environment while the defensive nature of the underlying shares lowers the chance of the laggard share being delivered," noted Bernard.