SGX expands range of DLCs issued by Societe Generale

Societe Generale
A view shows the logo on the headquarters of French bank Societe Generale Gonzalo Fuentes/Reuters

After the debut launch of Daily Leverage Certificates (DLCs) in July 2017, Singapore Exchange has bolstered the range of leverage certificates to be issued by Societe Generale with seven times more edge.

According to Singapore's local bourse, the six new DLCs offer seven times long or short exposure to the daily returns of the underlying indexes which include MSCI Singapore, Hang Seng Index (HSI) and Hang Seng China Enterprises Index (HSCEI).

The new set of certificates will be listed on January 24 and will commence trading on the same date. This set adds to the existing range of DLCs listed by Societe Generale which offer three times and five times leverage, long and short exposure on the same indices.

To recall, Singapore was the first in Asia to offer DLCs, providing Specified Investment Products (SIP)-qualified investors with a new product that will enable them to gain fixed leveraged exposure to key Asian indices. Since its trading commencement last year, the first batch of DLCs have already generated a total turnover of S$1.6 billion.

SGX Head of Products, Equities and Fixed Income Luuk Strijers said these certificates have garnered wide interest from investors in Europe.

"DLCs remain one of the fastest growing type of listed structured products in Europe since 2012, and we are delighted to offer this product to investors in Singapore, where market interest for listed structured products continues to grow," he said.

Meanwhile, Societe Generale's Global Markets in Asia Pacific Head of Cross Asset Listed Distribution Keith Chan said DLCs prove to be an effective investment vehicle, perfect for investors looking to capture short-term market opportunities.

"Societe Generale is expanding its DLC product range in Singapore together with SGX to further meet the growing demand we've seen from Asia. We are also encouraged to hear the positive feedback on our market-making quality especially the tight bid-ask spread we have maintained, from traders who have been trading our DLCs since the launch," he said.

DLCs come without implied price volatility, time decay and margin calls, according to SGX. Designed to be traded predominantly on an intra-day basis, the long and short DLCs give investors the flexibility to benefit from both rising and falling markets.