SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Equity Bottom-Up

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<li>
Investors can now gain exposure to a wider range of Hong Kong stocks via SGX-listed DLCs with the listing of new DLCs tracking CK Asset, China Merchants Bank, ANTA Sports, Li Ning &amp; WuXi Biologics. DLCs offer 5 times leverage and allow investors to participate in the price performance of an underlying stock at a fraction of the underlying stock price. 
	 </li>
	<li>
Issued by Societe Generale, the 5x Long and Short DLCs on CK Asset, China Merchants Bank, ANTA Sports, Li Ning &amp; WuXi Biologics started trading today on 25 October. The DLCs offer a fixed leverage of 5 times of the daily performance of the underlying stock i.e. a 1% move in the underlying stock generally translates into a 5% move in the DLC on a close-to-close basis.  
	 </li>
	<li>In the YTD till 22 Oct, CK Asset, China Merchants Bank and WuXi Biologics have outperformed the broader Hang Seng Index, which remained in the negative territory. While key Chinese sportswear brands, ANTA Sports and Li Ning, achieved double digits growth in revenues this year. </li>
</ul>
 

Daily Leverage Certificates (“DLCs”) and Structured warrants (“Warrants”) are financial instruments issued by a third-party financial institution, usually investment banks, and are traded in the SGX securities market. DLCs and Warrants offer investors an alternative instrument to participate in the price performance of an underlying asset at a fraction of the underlying asset price. Any failure of the issuer or guarantor to perform obligations when due (e.g. issuer becomes insolvent), may result in the loss of an entire investment. CK Asset, China Merchant Bank and WuXi Biologics outperform broader market 
CK Asset Holdings (CKA), China Merchants Bank (CMB) and WuXi Biologics (WuXi) listed on the Stock Exchange of Hong Kong have outperformed the broader Hang Seng Index (HSI) in the YTD ending 15 October. The respective YTD price returns of the three stocks are: 20% (CKA), 36% (CMB) and 10% (WuXi), outperforming the HSI by a significant margin as the benchmark index continued to remain in negative territory with a YTD price return of -4%.
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<figure>
 <img src='https://api2.sgx.com/sites/default/files/2021-10/Capture_20.PNG' alt='Stock price performance' />
 </figure>
 <div class='content-caption'>Stock price performance</div>
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In terms of volatility, the average 10D, 30D, 90D trailing volatility of the three stocks stand at 31%, 46% and 44% respectively. On the shorter term, WuXi Biologics trades at the highest 10D volatility of 47%,  15 percentage points above China Merchant Bank and 33 percentage points above CK Asset. ANTA Sports and Li Ning propel China’s sportswear industry 
The sportswear market in China is one of the largest and fastest growing in the world, underpinned by China's large textile industry, strong consumer support for domestic brands and a growing awareness of fitness and health. In the first half of this year, key Chinese sportswear brands – ANTA Sports and Li Ning – achieved double digits revenue growth, outperforming overseas brands with presence in China. ANTA Sports 
ANTA Sports designs, develops, manufactures and markets branded sportswear including footwear, apparel and accessories to consumers. It’s brand portfolio includes ANTA, FILA, DESCENTE and KOLON SPORT among others. 
The Group announced that it has become the official sportswear partner of the 2022 Beijing Winter Olympics Games and Paralympics Winter Games. In addition, the Group will provide Chinese athletes with first-class sports equipment and become the first Chinese sportswear brand to sponsor national Olympic events. 
For the latest 2021 interim report, the Group’s revenue rebounded by 55.5% to historical high of RMB22.81 billion while profit attributable to equity shareholders (with JV) surged 131.6% to RMB3.84 billion. Click <a href="https://files.services/files/394/2021/0824/20210826163906_36069575_en.pdf?force_isolation=true">here</a> to read more. Li Ning 
With more than 30 years of history, Li Ning is a leading athletic apparel, footwear and equipment company in China, founded by former Olympic gymnast Li Ning. The Group has various sales channels including franchise distributors, direct operations and e-commerce channels. In addition to its core LI-NING brand, other brands under the Group includes Double Happiness (table tennis), AIGLE (outdoor sports), Danskin (fashionable fitness products for dance and yoga) and Kason (badminton). 
According to their 2021 interim report, Li Ning reported 1H 2021 turnover of RMB10,197 million, up 65% year-on-year. This brought its half-year net profit attributable to equity holders to RMB1,962 million, more than the full year 2020’s RMB1,698 million. 
Over the course of the year, the Group noted that it benefited from the Chinese government’s effective control of the pandemic and consumers’ support for domestic brands, which significantly boosted growth in sales and gross profit margin. The Group expects that public awareness of fitness and health would further increase across China in the post-pandemic era, resulting in higher consumption demands for sports and health products. Click <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0830/2021083000625.pdf">here</a> to read more. Specifications of New DLCs on CK Asset, China Merchants Bank, ANTA Sports, Li Ning &amp; WuXi Biologics 
There are two types of DLCs –  a Long DLC and a Short DLC.  Long DLCs are for investors who have a bullish view of the underlying asset (i.e. the investor takes the view that the price of the underlying asset will go up). Short DLCs are for investors who have a bearish view of the underlying asset (i.e. the investor takes the view that the price of the underlying asset will go down). A summary of the terms of the new DLCs is tabled below.

<table class="table table-striped"><tbody>
<tr>
<td>
			Counter name
			</td>
			<td>
			Code
			</td>
			<td>
			Underlying stock 
			</td>
			<td>
			Type
			</td>
			<td>
			Leverage 
			</td>
			<td>
			Issue Price (S$)
			</td>
			<td>
			Expiry Date
			</td>
		</tr>
<tr>
<td>
			CKAsset 5xLongSG231019
			</td>
			<td>
			DJHW
			</td>
			<td>
			1113.HK
			</td>
			<td>
			LONG
			</td>
			<td>
			5x
			</td>
			<td>
			1.00
			</td>
			<td>
			19 Oct 2023
			</td>
		</tr>
<tr>
<td>
			CKAsset 5xShortSG231019
			</td>
			<td>
			DIBW
			</td>
			<td>
			1113.HK
			</td>
			<td>
			SHORT
			</td>
			<td>
			-5x
			</td>
			<td>
			1.00
			</td>
			<td>
			19 Oct 2023
			</td>
		</tr>
<tr>
<td>
			CMB 5xLongSG231019
			</td>
			<td>
			DTDW
			</td>
			<td>
			3968.HK
			</td>
			<td>
			LONG
			</td>
			<td>
			5x
			</td>
			<td>
			1.20
			</td>
			<td>
			19 Oct 2023
			</td>
		</tr>
<tr>
<td>
			CMB 5xShortSG231019
			</td>
			<td>
			DSGW
			</td>
			<td>
			3968.HK
			</td>
			<td>
			SHORT
			</td>
			<td>
			-5x
			</td>
			<td>
			1.20
			</td>
			<td>
			19 Oct 2023
			</td>
		</tr>
<tr>
<td>
			ANTA 5xLongSG231019
			</td>
			<td>
			DZDW
			</td>
			<td>
			2020.HK
			</td>
			<td>
			LONG
			</td>
			<td>
			5x
			</td>
			<td>
			1.50
			</td>
			<td>
			19 Oct 2023
			</td>
		</tr>
<tr>
<td>
			ANTA 5xShortSG231019
			</td>
			<td>
			DXGW
			</td>
			<td>
			2020.HK
			</td>
			<td>
			SHORT
			</td>
			<td>
			-5x
			</td>
			<td>
			1.50
			</td>
			<td>
			19 Oct 2023
			</td>
		</tr>
<tr>
<td>
			LiNing 5xLongSG231019
			</td>
			<td>
			DCJW
			</td>
			<td>
			2331.HK
			</td>
			<td>
			LONG
			</td>
			<td>
			5x
			</td>
			<td>
			1.50
			</td>
			<td>
			19 Oct 2023
			</td>
		</tr>
<tr>
<td>
			LiNing 5xShortSG231019
			</td>
			<td>
			DVBW
			</td>
			<td>
			2331.HK
			</td>
			<td>
			SHORT
			</td>
			<td>
			-5x
			</td>
			<td>
			1.50
			</td>
			<td>
			19 Oct 2023
			</td>
		</tr>
<tr>
<td>
			WuxiBio 5xLongSG221020
			</td>
			<td>
			DUAW
			</td>
			<td>
			2269.HK
			</td>
			<td>
			LONG
			</td>
			<td>
			5x
			</td>
			<td>
			1.20
			</td>
			<td>
			20 Oct 2022
			</td>
		</tr>
<tr>
<td>
			WuxiBio 5xShortSG221020
			</td>
			<td>
			DWDW
			</td>
			<td>
			2269.HK
			</td>
			<td>
			SHORT
			</td>
			<td>
			-5x
			</td>
			<td>
			1.20
			</td>
			<td>
			20 Oct 2022
			</td>
		</tr>
</tbody></table>
 Source: SGX

 

Investors are advised to read the issuer documents found on SGX website <a href="https://www.sgx.com/securities/company-announcements?value=SG%20ISSUER&amp;type=company&amp;PLST=PLST08">here</a> or the issuer’s DLC website <a href="DLC.socgen.com">here</a> for the full details of the DLCs including the product features (e.g. compounding effect and airbag mechanism) and the risks before investing in the DLCs. 
Investors should note these DLCs will track the moves in the underlying shares trading in Hong Kong, hence the market-making hours for these instruments will follow the stock’s trading hours on Hong Kong Stock Exchange from 9.30am to 4pm, with a break from 12-1pm. Specified Investment Products 
Daily Leverage Certificates are for investors who are willing to accept the risk of substantial losses up to the principal investment amount, possibly within a very short timeframe. Investors should also have sufficient understanding of the product and should possess either a high level of knowledge or sufficient trading experience to properly evaluate and assess the product structure, associated risks, valuation, costs and expected returns. All investors need to be Specified Investment Products (SIP) qualified to invest in DLCs. DLCs seek to achieve short-term investment results that correspond to the daily magnified performance of the underlying asset.
</body></html>





Investors can now gain exposure to a wider range of Hong Kong stocks via SGX-listed DLCs with the listing of new DLCs tracking CK Asset, China Merchants Bank, ANTA Sports, Li Ning &amp; WuXi Biologics. DLCs offer 5 times leverage and allow investors to participate in the price performance of an underlying stock at a fraction of the underlying stock price. 
	 
	
Issued by Societe Generale, the 5x Long and Short DLCs on CK Asset, China Merchants Bank, ANTA Sports, Li Ning &amp; WuXi Biologics started trading today on 25 October. The DLCs offer a fixed leverage of 5 times of the daily performance of the underlying stock i.e. a 1% move in the underlying stock generally translates into a 5% move in the DLC on a close-to-close basis.   
	 
	In the YTD till 22 Oct, CK Asset, China Merchants Bank and WuXi Biologics have outperformed the broader Hang Seng Index, which remained in the negative territory. While key Chinese sportswear brands, ANTA Sports and Li Ning, achieved double digits growth in revenues this year. 

 

Daily Leverage Certificates (“DLCs”) and Structured warrants (“Warrants”) are financial instruments issued by a third-party financial institution, usually investment banks, and are traded in the SGX securities market. DLCs and Warrants offer investors an alternative instrument to participate in the price performance of an underlying asset at a fraction of the underlying asset price. Any failure of the issuer or guarantor to perform obligations when due (e.g. issuer becomes insolvent), may result in the loss of an entire investment.  CK Asset, China Merchant Bank and WuXi Biologics outperform broader market  
CK Asset Holdings (CKA), China Merchants Bank (CMB) and WuXi Biologics (WuXi) listed on the Stock Exchange of Hong Kong have outperformed the broader Hang Seng Index (HSI) in the YTD ending 15 October. The respective YTD price returns of the three stocks are: 20% (CKA), 36% (CMB) and 10% (WuXi), outperforming the HSI by a significant margin as the benchmark index continued to remain in negative territory with a YTD price return of -4%.



      
    
    Stock price performance


In terms of volatility, the average 10D, 30D, 90D trailing volatility of the three stocks stand at 31%, 46% and 44% respectively. On the shorter term, WuXi Biologics trades at the highest 10D volatility of 47%,  15 percentage points above China Merchant Bank and 33 percentage points above CK Asset.  ANTA Sports and Li Ning propel China’s sportswear industry  
The sportswear market in China is one of the largest and fastest growing in the world, underpinned by China's large textile industry, strong consumer support for domestic brands and a growing awareness of fitness and health. In the first half of this year, key Chinese sportswear brands – ANTA Sports and Li Ning – achieved double digits revenue growth, outperforming overseas brands with presence in China.  ANTA Sports  
ANTA Sports designs, develops, manufactures and markets branded sportswear including footwear, apparel and accessories to consumers. It’s brand portfolio includes ANTA, FILA, DESCENTE and KOLON SPORT among others.  
The Group announced that it has become the official sportswear partner of the 2022 Beijing Winter Olympics Games and Paralympics Winter Games. In addition, the Group will provide Chinese athletes with first-class sports equipment and become the first Chinese sportswear brand to sponsor national Olympic events.  
For the latest 2021 interim report, the Group’s revenue rebounded by 55.5% to historical high of RMB22.81 billion while profit attributable to equity shareholders (with JV) surged 131.6% to RMB3.84 billion. Click here to read more.  Li Ning  
With more than 30 years of history, Li Ning is a leading athletic apparel, footwear and equipment company in China, founded by former Olympic gymnast Li Ning. The Group has various sales channels including franchise distributors, direct operations and e-commerce channels. In addition to its core LI-NING brand, other brands under the Group includes Double Happiness (table tennis), AIGLE (outdoor sports), Danskin (fashionable fitness products for dance and yoga) and Kason (badminton).  
According to their 2021 interim report, Li Ning reported 1H 2021 turnover of RMB10,197 million, up 65% year-on-year. This brought its half-year net profit attributable to equity holders to RMB1,962 million, more than the full year 2020’s RMB1,698 million.  
Over the course of the year, the Group noted that it benefited from the Chinese government’s effective control of the pandemic and consumers’ support for domestic brands, which significantly boosted growth in sales and gross profit margin. The Group expects that public awareness of fitness and health would further increase across China in the post-pandemic era, resulting in higher consumption demands for sports and health products. Click here to read more.  Specifications of New DLCs on CK Asset, China Merchants Bank, ANTA Sports, Li Ning &amp; WuXi Biologics  
There are two types of DLCs –  a Long DLC and a Short DLC.  Long DLCs are for investors who have a bullish view of the underlying asset (i.e. the investor takes the view that the price of the underlying asset will go up). Short DLCs are for investors who have a bearish view of the underlying asset (i.e. the investor takes the view that the price of the underlying asset will go down). A summary of the terms of the new DLCs is tabled below.




			Counter name
			
			
			Code
			
			
			Underlying stock 
			
			
			Type
			
			
			Leverage 
			
			
			Issue Price (S$)
			
			
			Expiry Date
			
		


			CKAsset 5xLongSG231019
			
			
			DJHW
			
			
			1113.HK
			
			
			LONG
			
			
			5x
			
			
			1.00
			
			
			19 Oct 2023
			
		


			CKAsset 5xShortSG231019
			
			
			DIBW
			
			
			1113.HK
			
			
			SHORT
			
			
			-5x
			
			
			1.00
			
			
			19 Oct 2023
			
		


			CMB 5xLongSG231019
			
			
			DTDW
			
			
			3968.HK
			
			
			LONG
			
			
			5x
			
			
			1.20
			
			
			19 Oct 2023
			
		


			CMB 5xShortSG231019
			
			
			DSGW
			
			
			3968.HK
			
			
			SHORT
			
			
			-5x
			
			
			1.20
			
			
			19 Oct 2023
			
		


			ANTA 5xLongSG231019
			
			
			DZDW
			
			
			2020.HK
			
			
			LONG
			
			
			5x
			
			
			1.50
			
			
			19 Oct 2023
			
		


			ANTA 5xShortSG231019
			
			
			DXGW
			
			
			2020.HK
			
			
			SHORT
			
			
			-5x
			
			
			1.50
			
			
			19 Oct 2023
			
		


			LiNing 5xLongSG231019
			
			
			DCJW
			
			
			2331.HK
			
			
			LONG
			
			
			5x
			
			
			1.50
			
			
			19 Oct 2023
			
		


			LiNing 5xShortSG231019
			
			
			DVBW
			
			
			2331.HK
			
			
			SHORT
			
			
			-5x
			
			
			1.50
			
			
			19 Oct 2023
			
		


			WuxiBio 5xLongSG221020
			
			
			DUAW
			
			
			2269.HK
			
			
			LONG
			
			
			5x
			
			
			1.20
			
			
			20 Oct 2022
			
		


			WuxiBio 5xShortSG221020
			
			
			DWDW
			
			
			2269.HK
			
			
			SHORT
			
			
			-5x
			
			
			1.20
			
			
			20 Oct 2022
			
		

 Source: SGX

 

Investors are advised to read the issuer documents found on SGX website here or the issuer’s DLC website here for the full details of the DLCs including the product features (e.g. compounding effect and airbag mechanism) and the risks before investing in the DLCs.  
Investors should note these DLCs will track the moves in the underlying shares trading in Hong Kong, hence the market-making hours for these instruments will follow the stock’s trading hours on Hong Kong Stock Exchange from 9.30am to 4pm, with a break from 12-1pm.  Specified Investment Products   
Daily Leverage Certificates are for investors who are willing to accept the risk of substantial losses up to the principal investment amount, possibly within a very short timeframe. Investors should also have sufficient understanding of the product and should possess either a high level of knowledge or sufficient trading experience to properly evaluate and assess the product structure, associated risks, valuation, costs and expected returns. All investors need to be Specified Investment Products (SIP) qualified to invest in DLCs. DLCs seek to achieve short-term investment results that correspond to the daily magnified performance of the underlying asset.



New DLCs tracking CK Asset, China Merchants Bank, ANTA Sports, Li Ning & WuXi Biologics

China

China Merchants Bank Co., Ltd. operates as a commercial bank. The Company provides deposits, loans, wealth management, asset custody, finance leasing, investment banking, and other banking services. China Merchants Bank conducts businesses domestically and internationally.

China Merchants Bank A (600036 CH)

New DLCs tracking CK Asset, China Merchants Bank, ANTA Sports, Li Ning & WuXi Biologics

Investors can now gain exposure to a wider range of Hong Kong stocks via SGX-listed DLCs with the listing of new DLCs tracking CK Asset, China...

Singapore Exchange Ltd (SGX)