ELS issuance in S. Korea tanks in H1 amid pandemic

Sales of equity-linked securities in South Korea tumbled in the first half of the year as the coronavirus pandemic weighed on major stock markets, data showed Wednesday.

The value of ELS issues came to 31.6 trillion won ($26.3 billion) in the January-June period, down 39.6 percent from six months earlier, according to the data from the Korea Securities Depository.

The figure was also down 33.8 percent from the 47.7 billion won floated during the same period a year earlier.

ELS refers to hybrid debt securities whose returns are linked to the performance of underlying equities, including a stock index.

Sales of the S&P 500-tracking ELS reached slightly over 20 trillion won, down 41 percent from the previous half, with ELS based on South Korea’s benchmark KOSPI tumbling 24 percent to 10.7 trillion won.

The KSD said South Korea’s ELS issuance plummeted in the first half as stock indexes in major economies were hit hard by the COVID-19 pandemic.

ELS products worth 25.5 trillion won were redeemed in the first half, down 56 percent from six months earlier and 43 percent from a year earlier.

The outstanding value of ELS products stood at 77.2 trillion won as of end-June, up 8.7 percent from the end of last year and 1.4 percent from a year earlier. (Yonhap)