Products Overview

Products Overview2019-03-01T17:40:59+00:00

Equity securities, generally referred to as shares or stocks, represent ownership units in the issuing company. In Hong Kong, shares are listed either on the Main Board or on the Growth Enterprise Market (GEM) of The Stock Exchange of Hong Kong Limited (Stock Exchange), a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEx). The Main Board is a market for capital formation by established companies with a track record of profits or companies meeting alternative financial requirements, and GEM is a market which provides capital formation opportunities for growth companies from all industries and of all sizes.

Derivative warrants are an instrument that gives an investor the right to “buy” or “sell” an underlying asset at a pre-set price prior to a specified expiry date. They may be bought and sold prior to their expiry in the market provided by HKEx. At expiry settlement is made in cash rather than a purchase or sale of the underlying asset. Derivative warrants can be issued over a range of assets, including stocks, stock indices, currencies, commodities, or a basket of securities. They are issued by a third party, usually an investment bank, independent of the issuer of the underlying assets. Derivative warrants traded in Hong Kong normally have an initial life of six months to two years and when trading in the market each derivative warrant is likely to have a unique expiry date.

CBBC are a type of structured product that tracks the performance of an underlying asset without requiring investors to pay the full price required to own the actual asset. They are issued either as Bull or Bear contracts with a fixed expiry date, allowing investors to take bullish or bearish positions on the underlying asset. CBBC are issued by a third party, usually an investment bank, independent of HKEx and of the underlying asset.

CBBC are issued with the condition that during their lifespan they will be called by the issuers when the price of the underlying asset reaches a level (known as the “Call Price”) specified in the listing document. If the Call Price is reached before expiry, the CBBC will expire early and the trading of that CBBC will be terminated immediately. The specified expiry date from the listing document will no longer be valid.

CBBC may be issued with a lifespan of three months to five years and are settled in cash only. They are traded on the cash market of HKEX.

Exchange Traded Funds (ETFs) are passively-managed and open-ended funds, which are traded on the securities market of Hong Kong Exchanges and Clearing Limited (HKEx). All listed ETFs are authorised by the Securities and Futures Commission (SFC) as collective investment schemes.

ETFs are designed to track the performance of their underlying benchmarks (e.g. an index, a commodity such as gold, etc.) and offer investors an efficient way to obtain cost-effective exposure to a wide range of underlying market themes. Similar to other securities, investors can buy or sell ETFs through their brokers anytime during the securities market’s trading hours.