Offer Multi Reverse Convertible with Look Back

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Offer Multi Reverse Convertible with Look Back

Post  Admin on Thu Oct 02, 2014 5:59 pm

This product by a prestigious European issuer with rating A or better is basically a Multi Barrier Reverse Convertible on equity indices with a guaranteed
coupon. However the look-back feature allows you to fix optimal initial prices during the first two months - which gives you the best market timing. The
coupon if 7.95% is fix. The product will be redeemed with 100% after 12 months if all underlying stock are at least at 60% of their initial levels -
optimized by the look back feature during the first 2 months. Otherwise redemption amount is reduced by lowest performance in the basket.

Multi Reverse Convertible with Look Back

Issuer: S&P Rating A or better
Currency: EUR quanto
Maturity: 1 year
Coupon: 7.95% guaranteed
Underlyings: Amazon, Netflix, Priceline, Tesla, Twitter
Capital Barrier: 60% at maturity
Look Back Period: 2 months
Reoffer Price: 99%

Euro-area factories reduced prices by the most in more than a year, Italy cut
its growth forecast and German manufacturing shrank, underlining the
mounting challenge facing central bank policy makers.

The ECB is on a mission to avert deflation as the euro region’s economic
landscape deteriorates. Purchasing Managers’ Indexes from Markit
Economic showed manufacturing also contracted in France, Austria and
Greece, with a gauge for the 18-nation region pointing to near-stagnation. A
separate report showed spillover to the U.K., with factory growth there at a
17-month low. See our chart of the day for Eurozone manufacturing index.

U.S. manufacturing cooled in September following the strongest rate of
growth in three years, while companies added 213,000 workers in
September, the first acceleration in hiring in three months. The U.S. dollar
touched a two-year high versus the euro and shows strength versus most
other currencies. Accordingly the Bloomberg Dollar Spot Index finished its
best quarter in six years.

Hong Kong’s pro-democracy protests swelled for a sixth day. Protest leaders
said they will besiege government offices if their demands aren’t addressed.

We think global economy is better diversified than few years ago. This both
provides stability and opportunities for selective investments. However if
Hong Kong protests spread over all China we would certainly see bad
market turbulences.
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