In a continued effort to feed Hong Kong's retail consumer hunger for more investment opportunities, Société Générale Acceptance NV ("SGA"), a wholly-owned subsidiary of the Société Générale Group, will this week launch the SG Excel Notes 9 and 10.
The launch builds on the successful early redemption of the "Best of" Daily Accrual Notes Series 6 and 7, only three months after their launch on 28 October 2005.
"To meet investors' needs, we are pleased to launch SG Excel Notes Series 9 and 10 which offer a 30% maximum return over a two-year period", says Sally Leung, vice president at SG Structured Products Asia ex-Japan.
The notes are linked to a basket of Hong Kong blue chips and H shares, which the bank says are well-positioned for growth. The low strike price set at 83% and 85% for Series 9 and 10 respectively, and the callable strike at 95%, further enhance the opportunities for return, even in volatile markets.
The Series 9 Notes use the following basket of stocks: Hutchison Whampoa, PetroChina and China Mobile, while the Series 10 Notes focus on Cheung Kong (Holdings), CNOOC, China Construction Bank - H Shares, and China Life Insurance - H Shares.
At maturity, investors will receive an extra bonus of 10% if the shares record a 10% increase versus their initial prices on any business day during the investment period. This combined with the low strike enables investors to make money even in down markets, argues Leung. Investors' break-even point is 62.25% and 70.55% of the least performing share price.
The bank argues that some of the upsides of the notes include the following: Regardless of the share price performance of the underlying basket of shares, there's a fixed coupon of 5% for Series 9 Notes and 7% for Series 10 Notes after six months.
There are maximum potential total coupons of up to 30% and 22% for Series 9 and Series 10 Notes respectively over two years. That is because investors may receive a potential fixed rate coupon of 5% of the denomination, payable every six months if the three-day average closing price of each of the shares on the relevant valuation date is at or above its strike price.