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UBS launches 5-Year Long-Short SUPER Notes
UBS today launched the 5-Year Long-Short SUPER Note which offers investors potential returns in both bull and bear markets. With 100% of the principal protected, and offering both "Long" and "Short/Hold" strategies, after the first year the instruments offer a coupon linked to two baskets of pan-Asian listed stocks.
The sixth in UBS's SUPER Note series, the Notes feature a 'Long basket' comprising stocks expected to have upside potential and a 'Short;/Hold' basket comprising stocks which are not expected to have upside potential. Component stocks are selected on the basis of the views of the research department of UBS Investment Bank.
"The instruments replicate long/short strategies commonly adopted by financial specialists and allow investors access to the right stocks at the right time by identifying over and undervalued companies. The Notes capture potential return from both baskets while the replacement mechanism optimises asset allocation in the baskets and provides protection from unexpected changes in the performance of the component stocks," said Min PARK, Head of Equity Risk Management at UBS, Asia.
"After the first year, during which the instruments offer a coupon of 5%, the calculation of the coupon is based on the performance spread between the component stocks in the 'Long' and 'Short/Hold' baskets multiplied by the participation rate," added Christopher F LEE, head of UBS's Equity Risk Management Intermediary desk.
Stocks in the 'Long' basket are: SK Telecom, Kookmin Bank, TSMC, TDK Corporation, Takeda Pharmaceutical, Cheung Kong (Holdings), Cathay Pacific Airways and China Telecom Corporation.
Component stocks in the 'Short/Hold' basket are: POSCO, Korea Electric Power Corporation (KEPCO), Winbond Electronics, Kyocera Corporation, Fanuc, Hong Kong Electric, Hong Kong & China Gas and Maanshan Iron & Steel.
The new instruments are available for subscription by retail investors in Hong Kong from 16th September.
Citibank is sole distribution agent.
Hong Kong, 20 September 2004
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