JPMorgan's equity-linked notes makes debut

Retail investors in Singapore with S$50,000 to spare and looking for annual returns of 7.5% may want to look at a new alternative investment product by JPMorgan, a leading provider of structured products such as equity derivatives.

The group's derivatives division is offering for the first time in Singapore its equity-linked notes, a structured product previously available only to institutional or high networth individuals through private banking channels.

Known as JPMorgan AsiaConfidence Notes, the notes are linked to four key underlying Asian benchmark stock market indices – namely, the MSCI Singapore Cash IX, MSCI Taiwan Index, Thailand's SET 50 Index and Kuala Lumpur Composite Index.

The notes come with limited protection of the principal investment sum – minimum amount of S$50,000 – should the markets turn bearish. Incremental level of investments can be made in $1,000 denominations.

If all the four market indices stay above 50% of their initial index levels, investors can expect to enjoy a quarterly fixed coupon rate of 1.875%, or an annual rate of 7.5% per annum over a two-and-a-half year period, if there is no early redemption.

An early redemption of the principal sum plus coupon payment will be triggered if on a given quarterly observation date – all the four market indices either fall 50% from the initial index levels; or rise to or above 100% of the initial index levels.

In other words, the notes would be ideal for investors who are of the view that the regional indices are likely to remain range bound or relatively flat over the next 30 months.

JPMorgan's executive director for equity derivatives, Ong Tsui Keng points out that the use of the various indices reduces the risks of exposure to some sectors or individual stocks. It should also mitigate the risks that some Asian sectors might be exposed to US industries. The principal sum is at risk only if any of the underlying market indices falls by more than 50% of the initial index level.

The offer period ends on 20 June, and the notes are distributed by DBS, HSBC and Standard Chartered Bank. JPMorgan may also be offering a second retail structured product soon, one that will be equity-linked and focused on the Asian markets if take-up for its inaugural product here is robust.

More

Towards a brighter tomorrow
At a time when a lot of companies are expected to weigh in with weaker sales and profit numbers amid the current global financial turmoil and downturn, JK Yaming expects to chalk up record figures for the full financial year.

Insulated US tech companies hit by slump
The US technology industry, which resisted the economy's growing weakness over the last year as customers kept buying laptops and iPhones, has finally succumbed to the slowdown.

BlackRock Global Views: 4th Quarter
Amid all of the current turmoil, our best advice is for investors to focus on broad diversification among asset classes. In these circumstances, we recommend that investors remain cautious...

Commodities to outperform stocks, says Superfund
Most commodities are likely to rebound and outperform stocks both in the short-term and over the next 3-5 years, according to managed futures fund provider, Superfund.

Deflation Fears Lurks as Global Demand Drops
As dozens of countries slip deeper into financial distress, a new threat may be gathering force within the American economy – the prospect that goods will pile up waiting for buyers and prices...

Global investors see equities as undervalued
Investors are waiting for the right conditions to return to equity markets amid the most pessimistic outlook yet recorded, according to Merrill Lynch's latest survey of fund managers.

Buy American. I Am by Warren Buffett
I've been buying American stocks. This is my personal account I'm talking about, in which I previously owned nothing but United States government bonds.

Sarasin finds silver lining in financial storm
Investors are advised to take a fresh look at global markets and seek opportunities despite the financial crisis over the past four weeks...

Threadneedle offers funds with short-sell capabilities
The UK-based Threadneedle group will soon be offering investors in Singapore mutual funds with short-sell capabilities known as 130/30 funds.

Investors eye the Fear Index
Fear is running high on Wall Street. Just look at the Fear Index. With all those stomach-churning free falls and sharp reversals in the stock market recently...

Q&A with Lead fund manager at Midas Capital International
Given the bearish market conditions, what would be your advice for investors in their approach towards their asset allocation strategies?

Q&A with Saxo Capital Markets, Asia Pacific Strategist
Given the bearish market conditions, what would be your advice for investors in their approach towards their asset allocation strategies?

Stock Pick
Man Wah Holdings: Neutral (Phillip Securities, 18 Nov), Swiber Holdings: Neutral (DMG, 18 Nov), Armstrong Industrial: Buy (DMG, 18 Nov), Olam: Buy (DMG, 17 Nov), Sembcorp Marine: Buy (DMG, 17 Nov)