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.

Asia’s leading multi-asset exchange

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

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Equity Bottom-Up

CapitaLand Ascendas REIT / Equity Bottom-Up

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<ul>
<li>
Daily Leverage Certificates (DLCs) on A-REIT, China Mobile, CSPC Pharma, China Life Insurance, Sun Hung Kai Properties (SHKP) and Sunac China started trading on 10 Dec 2019, offering 5x leverage exposure on the daily performance of the underlying stock. 
	 </li>
	<li>
10 DLCs with enhanced sensitivity and pricing ranges were also listed in Dec 2019 as the sensitivity of some of the existing DLCs had fallen significantly. The new DLCs with higher-sensitivity will be more suited for short-term trading activity. 
	 </li>
	<li>The addition, these new DLCs widens the Single Stock DLC offering to 77 DLCs, and allow traders to gain leveraged exposure to the underlying stocks with a lower capital outlay and less trading costs.   </li>
</ul>
 Daily Leverage Certificates (DLCs) are financial instruments issued by a third-party financial institution, in this case Societe Generale, and are traded on the SGX securities market. DLCs seek to achieve short-term investment results that correspond to the daily magnified performance of the underlying index or stock.

12 New DLCs on A-REIT, China Mobile, SHK, CSPC, Sunac &amp; China Life 

As of 10 December 2019, the Single Stock DLC offering added six new underlying stocks consisting of Ascendas REIT,  China Mobile, Sun Hung Kai Properties, CSPC Pharmaceutical, Sunac China and China Life Insurance.

The daily performance of each of these stocks will be tradable via a 5x Long and 5x Short DLC. The 5x means the new Single Stock DLCs offer fixed leverage of five times the daily performance of the underlying stock. If the underlying stock moves by 1% from its closing price of the previous trading day, the value of the 5x DLC will move by 5%. Tabled below are the details of the new Single Stock DLCs.

<table class="table table-striped"><tbody>
<tr>
<td>
			Market
			</td>
			<td>
			Underlying Stock
			</td>
			<td>
			Stock Code
			</td>
			<td>
			DLC Name
			</td>
			<td>
			DLC Price (SGD)*
			</td>
			<td>
			Leverage
			</td>
			<td>
			Expiry Date
			</td>
		</tr>
<tr>
<td rowspan="2">
			Singapore
			</td>
			<td rowspan="2">
			Ascendas REIT (A17U)
			</td>
			<td>
			DXAW
			</td>
			<td>
			DLC SG5xLong AREIT
			</td>
			<td>
			0.187
			</td>
			<td>
			5x
			</td>
			<td rowspan="12">
			8 December 2022
			</td>
		</tr>
<tr>
<td>
			DGBW
			</td>
			<td>
			DLC SG5xShort AREIT
			</td>
			<td>
			0.206
			</td>
			<td>
			-5x
			</td>
		</tr>
<tr>
<td rowspan="10">
			Hong Kong
			</td>
			<td rowspan="2">
			China Mobile (941.HK)
			</td>
			<td>
			DJAW
			</td>
			<td>
			DLC SG5xLong CMOB
			</td>
			<td>
			0.829
			</td>
			<td>
			5x
			</td>
		</tr>
<tr>
<td>
			DQBW
			</td>
			<td>
			DLC SG5xShort CMOB
			</td>
			<td>
			0.407
			</td>
			<td>
			-5x
			</td>
		</tr>
<tr>
<td rowspan="2">
			CSPC Pharma (1093.HK)
			</td>
			<td>
			DUFW
			</td>
			<td>
			DLC SG5xLong CSPC
			</td>
			<td>
			0.576
			</td>
			<td>
			5x
			</td>
		</tr>
<tr>
<td>
			DWAW
			</td>
			<td>
			DLC SG5xShort CSPC
			</td>
			<td>
			0.241
			</td>
			<td>
			-5x
			</td>
		</tr>
<tr>
<td rowspan="2">
			China Life (2628.HK)
			</td>
			<td>
			DHDW
			</td>
			<td>
			DLC SG5xLong CLIFE
			</td>
			<td>
			0.523
			</td>
			<td>
			5x
			</td>
		</tr>
<tr>
<td>
			DNZW
			</td>
			<td>
			DLC SG5xShort CLIFE
			</td>
			<td>
			0.277
			</td>
			<td>
			-5x
			</td>
		</tr>
<tr>
<td rowspan="2">
			Sun Hung Kai (16.HK)
			</td>
			<td>
			DRGW
			</td>
			<td>
			DLC SG5xLong SHKP
			</td>
			<td>
			0.728
			</td>
			<td>
			5x
			</td>
		</tr>
<tr>
<td>
			DPEW
			</td>
			<td>
			DLC SG5xShort SHKP
			</td>
			<td>
			0.463
			</td>
			<td>
			-5x
			</td>
		</tr>
<tr>
<td rowspan="2">
			Sunac China (1918.HK)
			</td>
			<td>
			DAWW
			</td>
			<td>
			DLC SG5xLong Sunac
			</td>
			<td>
			0.51
			</td>
			<td>
			5x
			</td>
		</tr>
<tr>
<td>
			DAUW
			</td>
			<td>
			DLC SG5xShort Sunac
			</td>
			<td>
			0.136
			</td>
			<td>
			-5x
			</td>
		</tr>
</tbody></table>
* The DLC Price as tabled above refers to the intrinsic close value of the DLC on 3 January 2020. Intrinsic Close is the value computed using the valuation formula of the DLCs stated on the relevant supplemental listing documents at market close. Investors should refer to the term sheets published on the issuer’s website (dlc.socgen.com) and SGX company announcement website for the full details.

Source: SGX, <a href="https://dlc.socgen.com/en/product/search">dlc.socgen.com</a>

While the expiry date of the Single Stock DLCs above is in three years, i.e. 8 December 2022, it is important to note that DLCs are designed for short term trading, with typical holding periods ranging from intra-day to five trading sessions.

Investors that hold the DLCs for longer than one Trading Day will notice that the return could be more or less than the leverage factor that is embedded within the DLC. This is because the performances of the underlying asset and the DLCs are reset at the end of each Trading Day.

When markets open on the next day, the performances of the underlying asset and the DLCs will be measured from the intrinsic closing levels recorded on the previous Trading Day. What this means, in practice, is the performance each day is locked in, and any subsequent returns are on top of what was achieved the day before. This is a process referred to as 'compounding'.

The compounding effect can positively enhance returns in trending markets (upward or downward) whilst negatively impacting returns when the markets are more volatile or trend sideways for long periods. To learn more about the compounding effect and other features of the DLCs, click <a href="https://www2.sgx.com/research-education/securities-products#Daily%20Leverage%20Certificates">here</a>.

10 New DLCs with Better Sensitivity and Pricing Range 

As the price level of a DLC falls to too low a level, the sensitivity of the DLC may also reduce significantly. In this scenario, the issuer may list a new DLC on the exact same underlying asset with the same direction and leverage factor, but with a higher sensitivity that is more favorable for short-term trading.

Sensitivity is the number of index points (for index) or dollar value(for stock) movement that is equivalent to a theoretical 1 tick movement of the DLC.

On 3 December 2019, 10 such DLCs were listed to provide investors with higher-sensitivity options. Tabled below are the details of the 10 DLCs.

<table class="table table-striped"><tbody>
<tr>
<td>
			Stock Code
			</td>
			<td>
			DLC Name
			</td>
			<td>
			Direction
			</td>
			<td>
			Leverage
			</td>
			<td>
			DLC Price (SGD)*
			</td>
			<td>
			Expiry Date
			</td>
		</tr>
<tr>
<td>
			DAEW
			</td>
			<td>
			DLC SG5xShortSunny A
			</td>
			<td>
			Short
			</td>
			<td>
			-5x
			</td>
			<td>
			0.366
			</td>
			<td rowspan="10">
			1 December 2022
			</td>
		</tr>
<tr>
<td>
			DZAW
			</td>
			<td>
			DLC SG5xLongPetChina A
			</td>
			<td>
			Long
			</td>
			<td>
			5x
			</td>
			<td>
			0.586
			</td>
		</tr>
<tr>
<td>
			DBCW
			</td>
			<td>
			DLC SG5xShortGeely A
			</td>
			<td>
			Short
			</td>
			<td>
			-5x
			</td>
			<td>
			0.268
			</td>
		</tr>
<tr>
<td>
			DYDW
			</td>
			<td>
			DLC SG5xShortAAC A
			</td>
			<td>
			Short
			</td>
			<td>
			-5x
			</td>
			<td>
			0.113
			</td>
		</tr>
<tr>
<td>
			DDBW
			</td>
			<td>
			DLC SG5xShortWilmar A
			</td>
			<td>
			Short
			</td>
			<td>
			-5x
			</td>
			<td>
			0.221
			</td>
		</tr>
<tr>
<td>
			DAZW
			</td>
			<td>
			DLC SG5xShortKepCorp A
			</td>
			<td>
			Short
			</td>
			<td>
			-5x
			</td>
			<td>
			0.389
			</td>
		</tr>
<tr>
<td>
			DTFW
			</td>
			<td>
			DLC SG5xShortDBS A
			</td>
			<td>
			Short
			</td>
			<td>
			-5x
			</td>
			<td>
			1.239
			</td>
		</tr>
<tr>
<td>
			DEZW
			</td>
			<td>
			DLC SG5xShortUOB A
			</td>
			<td>
			Short
			</td>
			<td>
			-5x
			</td>
			<td>
			1.238
			</td>
		</tr>
<tr>
<td>
			DMUW
			</td>
			<td>
			DLC SG5xLongOCBC A
			</td>
			<td>
			Long
			</td>
			<td>
			5x
			</td>
			<td>
			1.335
			</td>
		</tr>
<tr>
<td>
			DFJW
			</td>
			<td>
			DLC SG5xShortOCBC A
			</td>
			<td>
			Short
			</td>
			<td>
			-5x
			</td>
			<td>
			1.041
			</td>
		</tr>
</tbody></table>
* The DLC Price as tabled above refers to the intrinsic close value of the DLC on 2 January 2020. Intrinsic Close is the value computed using the valuation formula of the DLCs stated on the relevant supplemental listing documents at market close. Investors should refer to the term sheets published on the issuer’s website (dlc.socgen.com) and SGX company announcement website for the full details.

Source: SGX, <a href="https://dlc.socgen.com/en/product/search">dlc.socgen.com</a>

Differentiating between the existing and new DLCs

For single stock DLCs, apart from the difference in stock code, a letter ("A", "B" and so forth) will be added to the new product name for easy identification. For example, the name of the new 5x Short DLC on Sunny Optical is "DLC SG5xShortSunny A".

The new DLCs are usually launched at prices much higher than the existing ones allowing them to have tighter bid ask spread in percentage and higher sensitivity (requiring less movement in the underlying stock for the DLC to move one tick).

Specified Investment Products (SIPs)

DLCs are products with features that might be more complex in nature and are only suitable for investors who possess the investment knowledge of more complex products and have a high risk tolerance. Hence, all investors need to be qualified to trade in Specified Investment Products (“SIPs”) to be able to trade DLCs. Speak to your broker to find out more on how you can qualify to trade SIPs.

Investors should also read all listing documents provided by the issuer for other features such as the airbag mechanism, the risks and other information related to the product before trading the DLCs. The documents can be found under company information on SGX website or the Issuer’s website (dlc.socgen.com)
</body></html>





Daily Leverage Certificates (DLCs) on A-REIT, China Mobile, CSPC Pharma, China Life Insurance, Sun Hung Kai Properties (SHKP) and Sunac China started trading on 10 Dec 2019, offering 5x leverage exposure on the daily performance of the underlying stock.  
	 
	
10 DLCs with enhanced sensitivity and pricing ranges were also listed in Dec 2019 as the sensitivity of some of the existing DLCs had fallen significantly. The new DLCs with higher-sensitivity will be more suited for short-term trading activity. 
	 
	The addition, these new DLCs widens the Single Stock DLC offering to 77 DLCs, and allow traders to gain leveraged exposure to the underlying stocks with a lower capital outlay and less trading costs.   

 Daily Leverage Certificates (DLCs) are financial instruments issued by a third-party financial institution, in this case Societe Generale, and are traded on the SGX securities market. DLCs seek to achieve short-term investment results that correspond to the daily magnified performance of the underlying index or stock.

12 New DLCs on A-REIT, China Mobile, SHK, CSPC, Sunac &amp; China Life 

As of 10 December 2019, the Single Stock DLC offering added six new underlying stocks consisting of Ascendas REIT,  China Mobile, Sun Hung Kai Properties, CSPC Pharmaceutical, Sunac China and China Life Insurance.

The daily performance of each of these stocks will be tradable via a 5x Long and 5x Short DLC. The 5x means the new Single Stock DLCs offer fixed leverage of five times the daily performance of the underlying stock. If the underlying stock moves by 1% from its closing price of the previous trading day, the value of the 5x DLC will move by 5%. Tabled below are the details of the new Single Stock DLCs.




			Market
			
			
			Underlying Stock
			
			
			Stock Code
			
			
			DLC Name
			
			
			DLC Price (SGD)*
			
			
			Leverage
			
			
			Expiry Date
			
		


			Singapore
			
			
			Ascendas REIT (A17U)
			
			
			DXAW
			
			
			DLC SG5xLong AREIT
			
			
			0.187
			
			
			5x
			
			
			8 December 2022
			
		


			DGBW
			
			
			DLC SG5xShort AREIT
			
			
			0.206
			
			
			-5x
			
		


			Hong Kong
			
			
			China Mobile (941.HK)
			
			
			DJAW
			
			
			DLC SG5xLong CMOB
			
			
			0.829
			
			
			5x
			
		


			DQBW
			
			
			DLC SG5xShort CMOB
			
			
			0.407
			
			
			-5x
			
		


			CSPC Pharma (1093.HK)
			
			
			DUFW
			
			
			DLC SG5xLong CSPC
			
			
			0.576
			
			
			5x
			
		


			DWAW
			
			
			DLC SG5xShort CSPC
			
			
			0.241
			
			
			-5x
			
		


			China Life (2628.HK)
			
			
			DHDW
			
			
			DLC SG5xLong CLIFE
			
			
			0.523
			
			
			5x
			
		


			DNZW
			
			
			DLC SG5xShort CLIFE
			
			
			0.277
			
			
			-5x
			
		


			Sun Hung Kai (16.HK)
			
			
			DRGW
			
			
			DLC SG5xLong SHKP
			
			
			0.728
			
			
			5x
			
		


			DPEW
			
			
			DLC SG5xShort SHKP
			
			
			0.463
			
			
			-5x
			
		


			Sunac China (1918.HK)
			
			
			DAWW
			
			
			DLC SG5xLong Sunac
			
			
			0.51
			
			
			5x
			
		


			DAUW
			
			
			DLC SG5xShort Sunac
			
			
			0.136
			
			
			-5x
			
		

* The DLC Price as tabled above refers to the intrinsic close value of the DLC on 3 January 2020. Intrinsic Close is the value computed using the valuation formula of the DLCs stated on the relevant supplemental listing documents at market close. Investors should refer to the term sheets published on the issuer’s website (dlc.socgen.com) and SGX company announcement website for the full details.

Source: SGX, dlc.socgen.com

While the expiry date of the Single Stock DLCs above is in three years, i.e. 8 December 2022, it is important to note that DLCs are designed for short term trading, with typical holding periods ranging from intra-day to five trading sessions.

Investors that hold the DLCs for longer than one Trading Day will notice that the return could be more or less than the leverage factor that is embedded within the DLC. This is because the performances of the underlying asset and the DLCs are reset at the end of each Trading Day.

When markets open on the next day, the performances of the underlying asset and the DLCs will be measured from the intrinsic closing levels recorded on the previous Trading Day. What this means, in practice, is the performance each day is locked in, and any subsequent returns are on top of what was achieved the day before. This is a process referred to as 'compounding'.

The compounding effect can positively enhance returns in trending markets (upward or downward) whilst negatively impacting returns when the markets are more volatile or trend sideways for long periods. To learn more about the compounding effect and other features of the DLCs, click here.

10 New DLCs with Better Sensitivity and Pricing Range 

As the price level of a DLC falls to too low a level, the sensitivity of the DLC may also reduce significantly. In this scenario, the issuer may list a new DLC on the exact same underlying asset with the same direction and leverage factor, but with a higher sensitivity that is more favorable for short-term trading.

Sensitivity is the number of index points (for index) or dollar value(for stock) movement that is equivalent to a theoretical 1 tick movement of the DLC.

On 3 December 2019, 10 such DLCs were listed to provide investors with higher-sensitivity options. Tabled below are the details of the 10 DLCs.




			Stock Code
			
			
			DLC Name
			
			
			Direction
			
			
			Leverage
			
			
			DLC Price (SGD)*
			
			
			Expiry Date
			
		


			DAEW
			
			
			DLC SG5xShortSunny A
			
			
			Short
			
			
			-5x
			
			
			0.366
			
			
			1 December 2022
			
		


			DZAW
			
			
			DLC SG5xLongPetChina A
			
			
			Long
			
			
			5x
			
			
			0.586
			
		


			DBCW
			
			
			DLC SG5xShortGeely A
			
			
			Short
			
			
			-5x
			
			
			0.268
			
		


			DYDW
			
			
			DLC SG5xShortAAC A
			
			
			Short
			
			
			-5x
			
			
			0.113
			
		


			DDBW
			
			
			DLC SG5xShortWilmar A
			
			
			Short
			
			
			-5x
			
			
			0.221
			
		


			DAZW
			
			
			DLC SG5xShortKepCorp A
			
			
			Short
			
			
			-5x
			
			
			0.389
			
		


			DTFW
			
			
			DLC SG5xShortDBS A
			
			
			Short
			
			
			-5x
			
			
			1.239
			
		


			DEZW
			
			
			DLC SG5xShortUOB A
			
			
			Short
			
			
			-5x
			
			
			1.238
			
		


			DMUW
			
			
			DLC SG5xLongOCBC A
			
			
			Long
			
			
			5x
			
			
			1.335
			
		


			DFJW
			
			
			DLC SG5xShortOCBC A
			
			
			Short
			
			
			-5x
			
			
			1.041
			
		

* The DLC Price as tabled above refers to the intrinsic close value of the DLC on 2 January 2020. Intrinsic Close is the value computed using the valuation formula of the DLCs stated on the relevant supplemental listing documents at market close. Investors should refer to the term sheets published on the issuer’s website (dlc.socgen.com) and SGX company announcement website for the full details.

Source: SGX, dlc.socgen.com

Differentiating between the existing and new DLCs

For single stock DLCs, apart from the difference in stock code, a letter ("A", "B" and so forth) will be added to the new product name for easy identification. For example, the name of the new 5x Short DLC on Sunny Optical is "DLC SG5xShortSunny A".

The new DLCs are usually launched at prices much higher than the existing ones allowing them to have tighter bid ask spread in percentage and higher sensitivity (requiring less movement in the underlying stock for the DLC to move one tick).

Specified Investment Products (SIPs)

DLCs are products with features that might be more complex in nature and are only suitable for investors who possess the investment knowledge of more complex products and have a high risk tolerance. Hence, all investors need to be qualified to trade in Specified Investment Products (“SIPs”) to be able to trade DLCs. Speak to your broker to find out more on how you can qualify to trade SIPs.

Investors should also read all listing documents provided by the issuer for other features such as the airbag mechanism, the risks and other information related to the product before trading the DLCs. The documents can be found under company information on SGX website or the Issuer’s website (dlc.socgen.com)



12 New DLCs on A-REIT, China Mobile, CSPC, China Life, SHKP & Sunac