Macquarie to offer exchange-traded ELIs in HK by month-end

Australia’s Macquarie Bank is looking at listing Equity Linked Instruments (ELIs) on the Hong Kong Exchanges & Clearing (HKEx) by the end of August, according to Matthew Long, Macquarie's Hong Kong-based associate director for equity derivatives sales.

The specifications of the products have yet to be determined, and Macquarie is still studying new ELIs that were listed on the HKEx on August 5. Exchange-traded ELIs typically attract retail investors, as their size is smaller than over-the-counter products.

Macquarie’s OTC ELIs, for instance, have a minimum size of HK$100,000, and are targeted at more sophisticated high-net-worth investors. Exchange-traded ELIs would have sizes of about HK$30,000 to HK$50,000 and would appeal to less sophisticated retail investors.

The first listed ELIs are: Credit Suisse First Boston China Mobile (Hong Kong), KBC Financial Products International Cheung Kong (Holdings), KBC Financial Products International HSBC Holdings, KBC Financial Products International Hutchison Whampoa, KBC Financial Products International Sun Hung Kai Properties, SGA Société Générale Acceptance NV Cheung Kong (Holdings).

On the first day of trading, the ELIs had a total turnover of more than HK$8 million, with 116,400 shares traded in 144 deals, according to the exchange. KBC’s HSBC ELI attracted the overwhelming majority of volume, with HK$7.3 million.

HKEx said it expected four more ELIs to list on the exchange by the end of this week, but declined to give any further detail.