What is KIKO ELN?
It is a type of ELNs with an investment period of 3 - 9 months, which allows you to earn a higher return than general notes investment. However, your return will be based on the underlying asset, investment horizon, and strike level, knock-in and knock-out level.
Auto callable Note or KIKO ELN offers steam of cash flow monthly in which suitable for a sell and buyback strategy. It can also enhance high yield short-term returns especially in an unclear market direction or sideways trend.
Why KIKO ELN?
- Higher annual return than other fixed-income securities with your chosen risk-level.
- Opportunity on high yield on short term investment during market sideways.
- Earning higher yield in term of monthly coupon
More about KIKO ELN
Who is suitable for KIKO ELN?
- Investors with risk tolerance who want to generate high return.
Maximum profit and loss for KIKO ELN
- Highest Profits = Yield depending on your chosen risk-level
- Highest Losses = Standard Investment in stock market when receive stock back at Strike Price
Calculation Examples
After the investor has opened an ELN account, the first thing investor needs to know before start investing in ELNs must be the prices and yields of our products. Investors can follow up on the indicative price sheet of KIKO ELN and seeking additional advice from the investment advisor.
Pricing Sheet
| Pricing Sheet : KIKO ELN | |||
|---|---|---|---|
|
Trade Date |
11 August 2020 |
Strike Level (%) |
95% |
|
Issue Date |
14 August 2020 |
Notional Amount |
30,000,000 บาท |
|
Valuation Date |
11 February 2020 |
Settlement Method |
Physical / Cash Delivery |
|
Maturity Date |
15 February 2020 |
No. of holding days |
185 Days |
|
Observe Date |
10 September 2020 |
Yield Payment Date |
14 September 2020 |
|
9 October 2020 |
14 October 2020 |
||
|
12 November 2020 |
16 November 2020 |
||
|
9 December 2020 |
14 December 2020 |
||
|
12 January 2020 |
14 January 2020 |
||
|
11 February 2020 |
15 February 2020 |
||
| Underlying | Spot Price (THB) | Strike Price (THB) | Knock-out Price (THB) | Knock-in Level (%) | Knock-in Price(THB) | Annualized Yield (Before Tax) | Number of shares for delivery |
|---|---|---|---|---|---|---|---|
| AAA | 49.00 | 46.55 | 49.98 | 82% | 40.18 | 9.80% | 644,468.3136 |
| 78% | 38.22 | 7.80% | |||||
| 74% | 36.26 | 5.50% |
Remark:
Spot Price is the AAA share close price in the day before (10 August 2020). The example price sheet will only be use for calculation reference. It is not the actual price that investor will get. Knock-in level, Knock-out level, Strike level, Annualized yield, and Issue price are the only factors that investor will get from the pricing sheet. (These factors do not depend on the spot price.)
When you start investing in ELN, we will call this date “Trade Date”
| 1. Trade Date (11 August 2020) | |
|---|---|
| Assume you choose AAA stock at 95% Strike level, Notional amount of 30 million Baht, and spot price of 49 Baht. | |
| Strike Price | 46.55 Baht (95% of Spot Price) |
| Notional Amount | 30,000,000 Baht |
| Knock-out Price | 49.98 Baht (102% of Spot price) |
| Knock-in Price | 40.18 Baht (82% of Spot price) |
| No. of Shares that will be delivered | 644,468.3136 Shares (30,000,000 / 46.55) |
| Annualized Yield (Before Tax) | 9.80% |
| Return (Before tax) | 245,000 Baht [30,000,000 x (9.80% / 12)] |
| No. of holding days | 185 Days |
| 2. Issue Date (14 August 2020) is Trade Date 2 Working Days | |
|---|---|
| Money will be transfer to CIMBS account for buying KIKO ELN | |
| Notional Amount | 30,000,000 Baht |
| 3. Observe Date is viewing yield date 2 Working Days | |
|---|---|
|
Observe Date is the price viewing date to determine the return that investors will receive every 1 month until the Valuation Date, the investor may receive different returns in each scenario. Giving an example of 4 cases as follows. |
|
|
Case 1 (46.55 > AAA < 49.98) Knock-in > Spot Price < Knock-out The stock price does not occur KO Event and KI Event during Observation date (until Valuation Date). |
Investor receive 30,000,000 Baht in cash and Monthly Return of 6 month 1,470,000 Baht in cash (245,000 x 6 ) |
|
Case 2 ( AAA > 49.98) Spot Price > Knock-out Early redemption event taken when the stock price does occur KO Event in the fourth month of Observation date. |
Investor receive 30,000,000 Baht in cash and Monthly Return of 4 month 980,000 Baht in cash (245,000 x 4 ) |
|
Case 3 (40.18 But AAA > 46.55) KI Event But Spot Price > Strike Price The stock price does occur KI Event at Observation date but equal or higher than Strike Price at Valuation Date. |
Investor receive 30,000,000 Baht in cash and Monthly Return of 6 month 1,470,000 Baht in cash (245,000 x 6 ) |
|
Case 4 (40.18 And AAA < 46.55) KI Event And Spot Price < Strike Price The stock price does occur KI Event during Observation date and lower than Strike Price at Valuation Date. |
Investor receive 644,400 Shares and 3,180 Baht in cash (Odd lot 68.3136 x 46.55) and Monthly Return of 6 month 1,470,000 Baht in cash (245,000 x 6 ) |
| 4.Valuation Date (11 February 2020) | |
|---|---|
| The valuation date is the final date to summarizing the returns that investors will receive But if the stock price does occur KO Event (example in Case 2), the investor will receive a return according to an early redemption date. | |
| 5. Maturity Date (15 February 2020) | |
|---|---|
| Investor receive return according to the case in Valuation Date | |
Overall Return
Disclaimer:
The Structured Note is offered to High-Net-Worth investors (HNW), Ultra High-Net-Worth (UHNW) and institutional investors (II). It is a high-risk and complex product. The value of the Structured Note depends on uncertain factors. Investors may lose the principal in whole or part or receive lower-than-expected returns. Structured Notes do not have a secondary market for trading and have transfer restrictions as specified by the terms and conditions. Please understand the product's characteristics, the conditions of return, and the risks involved, and seek additional advice before making an investment decision.