Repayment of derivatives-tied securities on rise in Q1

Repayment of derivatives-tied securities rose during the first quarter of this year as more investors took profits amid a rally in the local stock market, data showed Thursday.

The issuance of equity-linked securities and derivatives-linked securities (DLS) gained by 11.4 trillion won ($9.97 billion) on year during the January-March period, but repayment also rose by 18.1 trillion won.

Accordingly, the total balance of derivatives-tied securities fell to 97.7 trillion won at the end of March, compared with 101.5 trillion won a year ago, the Financial Supervisory Service said in a statement.

Brokerages sold 19.9 trillion won worth of ELS products during the quarter, but repayment of ELS products stood at 24 trillion won for the same period.

Sales of DLS products stood at 7.7 trillion won during the quarter, while repayment of DLS products was valued at 6.4 trillion won.

Such products are structured to track the performance of underlying assets, not guarantee the principle, as investors prefer instruments that promise higher yields. (Yonhap)