SGX unveils 10 new leveraged exposure products

It will let SIP-qualified investors take long or short positions with leverage on the daily performance of the underlying stocks.

The Singapore Exchange (SGX) will welcome the listing of 10 new Single Stock Daily Leverage Certificates (DLCs) which will bring in five times leverage on Singapore blue-chip companies and well-known regional stocks.

Through the Single Stock DLCs from issuer Société Générale, specified investment products (SIP)-qualified investors will be able to take long or short positions with leverage on the daily performance of the underlying stocks.

“We have been receiving positive feedback on the DLCs since their introduction to the market last summer, and we think it is the right time to expand the underlying coverage to single stocks,” Keith Chan, head of Cross Asset Listed Distribution at Société Générale’s Global Markets in Asia Pacific, said.

The first batch of stocks includes selected Straits Times Index (STI) companies such as DBS, UOB, OCBC, Singtel, Venture, and Keppel Corporation Limited. It also includes Hang Seng Index (HSI) stocks such as Tencent Holdings and Ping An Insurance Group.

Since the introduction of the first DLC, the turnover of DLCs traded on SGX has exceeded $3.5b.

“This [move] will also broaden the range of innovative and attractive trading products offered by brokers.” SGX head of research and products Chan Kum Kong said. “With DLCs gaining traction from both retail and institutional participants, we expect the demand for our listed structured products to continue to grow in tandem.”

Back in July 2017, SGX was the first bourse in Asia to offer trading of DLCs. SGX hosts the trading of 18 DLCs on three developed market indices, namely MSCI Singapore, HSI and Hang Seng China Enterprises Index, with leverage levels of three, five and seven times.