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Weekly Wrap Up

12 September 2016

Rationale: low rate, high expectation


The recent US economic figures negatively impacted

Suggested is an investment product suitable to qualified

financial markets and pushed long term rates downward.

investors with a relative neutral to slightly bull view on the

Looking forward, the US economy should pursue its efforts 10years US swap rates.The investment opportunity offers a
to maintain growth and long term rates should increase

guaranteed annual return of 7.40%, over a rather short

again, even if at moderate path

period,12 months and a comfortable protection on the


capital initially invested (65% barrier with a gear put)

If you share this market view and look for yield, you could
be interested in the below Reverse Convertible US CMS
10y
In comparison to an investment yield product with

The 10YUS Swap Rates are quoting (see below graph) at

protection barrier (such as American or European style),

rather low levels. Most analysts expect an increase in the

this proposal offers extra safety on the capital thanks to

long term US rates before the end of the year

agear put(see mechanism below)

Product Suggestion: Reverse convertible on CMS10 years, guaranteed coupon


Product parameters:

How does the product work:

Currency: USD

Scenario 1: At maturity, underlying up 10%, investors get

Maturity: 1 year

100% capital back + 7.40% coupon

Underlying: US CMS 10 years (USCS1010)


Coupon: 7.40% p.a.

Scenario 2: At maturity, underlying down 10%, investors

Guaranteed coupon

get 100% capital back+ 7.40% coupon

Strike level: 65% (gear put)


Scenario 3: At maturity, underlying down 50%, investors

Spot level: 1.5160% *

get 83% capital back (instead of a 50% back with an


european barrier) + 7.40% coupon

Profile: Aggressive
Alternative: EUR, European barrier 65%, coupon 8.05%
p.a.
* Pricing very sensitive to spot level

Rationale: The world shifted a little bit more to the East


Tencent Holdings Ltd., the operator of WeChat and QQ,

Qualified investors with a rather bullish view on Tencent

the countrys most popular social media services, has

Holdings LTD could be interested in the following

gained 38% YTD. It has surpassed China Mobile Ltd. to

product. The enclosed investment product, a Bonus

become the countrys largest corporation. This is a

certificate, is built on a 24 months time horizon. Qualified

symbolic ascendance of the new economy over

investors will receive 140% the appreciation of this stock.

traditionally dominant government-owned enterprises

Upside performance is capped to 140% of initial level,


maximum redemption is 156% of initial capital

Tencent Holdings Ltd. was valued at HK$ 1.99 trillion


($256.6 billion) after last Monday's 4.2% gain. The firm's

Capital is at risk if the depreciation of the stock is 25% or

share price has gained 38% this year, compared with

more on the daily close observations. Qualified investors

about 10% for China Mobile. The company also entered

can be exposed to 100% loss

the top 10 globally joining Apple Inc. and Alphabet Inc.


According to Bloomberg, analysts are at 100% buy and

The graph illustrates Tencent Holdings Ltd. performance

hold and at 93% buy on Tencent

over the last five years

Product Suggestion: Bonus Certificate on Tencent Holding Ltd.


Product parameters:

How does the product work:

Currency: USD

Scenario 1: At maturity if the share's performance is up

Maturity: 24 months

10% and the stock never traded at or below 75% of initial

Underlying: Tencent Holdings Ltd. (700 HK)

price on a daily close, investors get 100% capital back +

Payout: 140% payout of the positive performance of the

14% (10%*140%)

share at maturity
Capital barrier: 75% daily close barrier

Scenario 2: At maturity if the share's performance is up

Cap level: 140% of initial level

50% and the stock never traded at or below 75% of initial


price on a daily close, investors get 100% capital back +
56% (cap level 140%)

Profile: Aggressive

Scenario 3: At maturity if the share's performance is down


15% and has traded at or below 75% of initial price on a
daily close, investors get 85% capital back
Scenario 4: At maturity if the share's performance is down
30% on a daily close, investors get 70% capital back

Chart of the Week: Brazil, Olympic expectations


Half a million guests visited Brazil for the Olympic Games. According to the president of brazilian tourist board "this
will bring good results in the future, with new investments potential"
This week, Brazil analyst raised their 2017 growth outlook, from 1.1% to 1.3%, Brazil's central bank anounced a
further easing monetary policy and industrial output expanded for a 5th consecutive month in July, production rose
0.1% in July from June, slightly above forecast
Qualified investors with a rather positive view on Brazilian economy and its equity market could consider the enclosed
investment opportunity

Investment suggestion: Leveraged Call spread / USD / 18 months / iShare MSCI Brazil Capped ETF (EWZ) / Capital
Barrier 70% (European) / 130% upside participation up to cap level (120% of intial fixing)/ Strike Level: 100% /
Payout: At Maturity if EWZ closes above initial level investors get 100% capital back + 130% upside participation (up
to 126%) / At maturity if EWZ closes below 70% of initial level capital is at risk (100% negative performance) /
Otherwise investor get 100% capital back / Profile: Aggressive
investors get 100 capital + 8.80% p.a/ At maturity if WTI closes below $30 (or above $58) investors' capital is at risk /
Profile: Aggressive

Disclaimer: this document, the trade ideas and indicative values set out herein have been prepared by Profin Partners for discussion and/or
information purposes only and are being provided to you based on our reasonable belief that you are a sophisticated institutional investor that is
capable of assessing the merits and risks of the transactions and financial matters discussed herein. This document is a financial promotion. ProFin
Partners, 100 New Bond Street, 4th Floor Mayfair, London W1S 1SP Tel/Fax: +44 20 8050 5292 contact@profinpartners.com. Authorized and
regulated by UK FCA (595504). Consequently this document is expressly not directed at or for distribution to retail customers as defined by the
Financial Conduct Authority. Derivative products should only be executed by investors who have a full understanding of the complexity and risks
involved in trading derivatives. This material is for the private information of the user, and ProfinPartners is not soliciting any action based upon it.
ProfinPartners shall have no liability, contingent or otherwise, to the user or to third parties, for the quality, accuracy, timeliness, continued
availability or completeness of the data nor for any special, indirect, incidental or consequential damages which may be incurred or experienced
because of the use of the data made available herein. Opinions expressed are our current opinions as at the date of this material only. Past
performance is not an indication of future performance. The information provided herein (theInformation) (i) is intended for your information only

and is not to be provided to, or used by, any other person or party, (ii)is supplied in good faith, and (iii) is based on information which we believe, but
do not guarantee, to be accurate or complete.
Profinpartners is a private limited company registered in England & Wales (6915047).
Registered office address is 201 Haverstock Hill, London NW34QG.
Authorised and regulated by the UK Financial Conduct Authority (FCA-595504).

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