Sales of derivatives-linked securities dip 32% in Q1

The issuance of derivatives-linked securities (DLS) in South Korea plummeted in the first quarter of the year amid uncertainties over the new coronavirus, data showed Tuesday.

In the January-March period, sales of DLS amounted to 5.3 trillion won ($4.3 billion), down 31.7 percent from the previous quarter, according to the data from the Korea Securities Depository (KSD). The reading also marks a 17.5 percent fall from a year ago.

DLS tracks the performance of interest rates, currency values and other underlying assets, promising high returns for investors.

The plunge in DLS sales came as the COVID-19 pandemic triggered uncertainties across global financial markets.

High volatility in the local financial markets and nose-diving oil prices dragged down overall DLS sales, KSD said.

By base asset, the issuance of the interest rate-tracking DLS shrank to 2.3 trillion won, down 29.9 percent from the previous quarter. Such instruments took up about 43.2 percent of the total DLS sales in the first quarter.

Sales of credit-tracking DLS contracted 25.8 percent on-quarter to 1.69 trillion won, compared to the mixed-type‘s 42.9 percent fall to 824 billion won.

Commodities-linked DLS sales also tumbled 34.4 percent to 78.6 billion won, down 34.4 percent from a quarter ago.

The outstanding value of DLS products reached 34.6 trillion won as of the end of March, down 7.7 percent on-quarter and 12.4 percent on-year. (Yonhap)