Business
Hong Kong ELS turmoil Unfolds: Escalating Damages Surge Like an Avalanche
- 2024-06-13
- Business
- By: Subin JO、Runqing LIEdited by: Ji Youn Lee、Chi On LIU
- 2024-06-13
Three years ago, Kang Jong Hyun, 62, visited a major commercial bank with the intention of utilising the retirement savings he had accumulated through a lifetime of dedicated work. Drawing on decades of experience, he is striving to formulate an investment plan for a better old age life. In an interaction with a banker, he revealed that despite clearly expressing a preference for safe investments, he was advised to consider Equity Linked Securities products linked to the performance of the Hang Seng China Enterprises Index. "I told the banker I dislike risky investments like funds and prefer something safe," Kang said. However, influenced by the banker's recommendation, he subscribed to ELS instead of opting for regular interest-bearing deposits. "The banker assured me this product was not risky and similar to a deposit. I fell into this situation simply because I trusted the bank. I can't even tell my family, and I can't sleep at night," Kang said. According to the Financial Supervisory Service's investigation in January, three out of 10 bank ELS investors are 65 or older and often need help comprehending the complex structure of derivative products. Furthermore, 1 out of every 10 investors were first-time subscribers, indicating a need for familiarity with such financial instruments. The criterion for considering bank investors as elderly is set at 65 in South Korea, emphasising the heightened responsibility to exercise caution when advising and recommending investments to these senior individuals. As of November 2023, the total volume of Hong Kong index-linked ELS products sold to investors amounted to 19.3 trillion KRW (around HK$ 11.3 billion). Among them, about 82.1% were sold by banks, according to the Financial Services Commission of South Korea. As a derivative, the ELS product linked to HSCEI aims to pay customers with a fixed return based on the …
Impact investment: change the world and return a profit
- 2024-06-13
- Health & Environment
- By: Ji Youn Lee、Chi On LIUEdited by: Subin JO、Runqing LI
- 2024-06-13
Florian Spiegel hopes to save the planet by promoting fuel-related securities, which represent a part of impact investing. Recently, his company Evident Capital released the world’s first tokenised airplane leasing fund with a fund mandate on sustainable fuels. The Global Impact Investor Network, a US-based non-profit organisation that promotes impact investing, defines impact investing as investments that aim to create social and environmental impact alongside financial return. Compared to traditional investment, which focuses on risk and return, impact investment aims to put a new axis on investment-- mainly, the social impact investments have. In recent years, a growing number of corporations have recognised the importance of aligning their financial investment with their social and environmental goals, and the impact investing landscape is changing as new actors. Spiegel’s company, Evident Capital, aims to improve the financial market through transitional investment, a branch of impact investment. To cut the costs of current fossil fuel giants through cleaning the process, transitional investment incentivises oil and transport companies to invest in fuel-cutting equipment. Evident’s platform receives various private projects and then uploads them as divided digital securities on their network. One of their projects, a Liquified Natural Gas carrier ship from Honduras, was able to raise enough funding from the security to build and buy new carriers, making it more efficient to use fossil fuels than other companies. “A one percent decrease in the carrier gas industry can reduce more carbon than what 20,000 solar panels can create in a year,” Spiegel said. Although official numbers cannot be listed, the company says uploaded products have reached a total of US$ 50 million (HK$ 391 million) within the year they have been on the platform. “Small to medium investors who want to reach the impact investment market right now do not have enough funds …
