TheStar
KUALA LUMPUR: AmBank Group has launched its first structured deposit product, AmStructured Deposit - Global Bourses, which is expected to yield returns of 24.5% upon maturity in three years.
The three-year floating rate negotiable instrument of deposit (FRNID), pays a fixed return of 2% in the first year while the returns for year two and three are determined by the performance of eight global bourses.
The eight are London Stock Exchange Group, Deutsche Bourse AG (Germany), Bolsas y Mercados Espanoles (Spain), NYSE Euronext, InterContinental Exchange Inc, Nasdaq Stock Market Inc, Hong Kong Exchanges and Clearing Ltd, and Singapore Exchange Ltd.
Group managing director Cheah Tek Kuang said the deposit had a “catch-up coupon” structure, whereby if the performance of the underlying stocks was poor in the first and second years, depositors could still benefit from a higher coupon in the third year if the underlying stocks recovered.
“The deposit is close-ended with a targeted size of RM200mil,” he said at the launch yesterday. He said FRNID accorded capital preservation for investors and enabled them to share the benefits of the growth potential of the stocks
“In assessing the current market volatility, we find there is growth potential that can be tapped from the eight stock exchanges.
“Earnings of each stock exchange are dependent on the volume of transaction, regardless of market direction.
“In addition, the recent increasing merger and acquisition activities in all the global bourses, driven by increasing revenues from the surge in trading volume and advent of exchange-traded derivatives, greatly heightens the prospects for further gains,” Cheah said.
Minimum investment for this product is RM100,000 while the minimum additional investment is RM50,000.
AmInvestment Bank Group chief investment officer, fixed income, Yvonne Phe Kheng Peng said the group planned to launch a similar structured deposit product every quarter.
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