Bualuang Securities recommends bonds with embedded derivatives Create cash flow when the stock market sideways

Bualuang Securities Revealing short-term cash flow generating tools “Debentures with embedded derivatives” have received good response from investors. Reflected through the total value issued and offered for sale in 66, reaching the highest point in 9 years. Recommended for investing during the sideways stock market.

Mr. Bannarong Pitchayakorn, Senior Managing Director Securities trading business Bualuang Securities Public Company Limited revealed that Thai stock market which performed worse than the global stock market in 2566 due to various pressure factors, causing investors to have limited investment options when considering opportunities and risks.

In the past year 2566 Bualuang Securities Another investment option has been developed under the concept “Investor-Centric” By taking the needs of investors as the main focus in developing new alternative products that can better meet investment situations. By issuing and offering new financial innovations like Debentures with embedded derivatives such as Fixed Coupon Note (FCN) and Equity Linked Note Plus (ELN Plus) To enhance the Company's derivative bonds with more comprehensive options from the existing Equity Linked Note (ELN) and Reverse Equity Linked Note (RELN).

Last year, bonds with embedded derivatives of Bualuang Securities Received a good response from investors. This is reflected in the total value issued and offered for sale, reaching the highest point in 9 years, contrary to the investment trend in the past year that slowed down in almost every market.

The value of investing through bonds with embedded derivatives of Bualuang Securities Able to rise, indicating the needs of investors who have adjusted their strategies by generating returns to cope with the Thai stock market. Through creating cash flow with bonds that have embedded derivatives very well.

The highlight of Fixed Coupon Note (FCN) is that it is a 3-6 month instrument. It is designed to create short-term cash flow, especially during periods when the stock market moves sideways. Investors will receive periodic interest throughout their holdings. At a rate of approximately 8-12% per year without having to time the stock trading yourself.

At the same time, there is also a Knock Out feature in every installment where interest is paid. To increase the chance of receiving the principal back before the deadline. If the price of the underlying stock price increases from the price on the contract opening date to increase flexibility in investment planning.

However, if during the contract the price of the underlying stock drops below the Knock In price, which is usually 15-20% lower than the stock price on the contract opening date, it will give the investor an opportunity to receive back the underlying stock at a cost equal to. Price on the contract opening date, which may result in unrealized losses (Unrealized Loss), similar to buying the underlying stock at the first day's price but the stock moves down. Only if it is FCN, in this case the investor will still receive interest “every period” throughout the FCN holding.

Bualuang Securities' product development team has also further differentiated FCN by adding a feature around interest payment frequency. Normally, FCN contracts pay interest every month, but the company's FCN has the option to pay interest every two weeks, allowing investors to receive cash flow faster, more frequently and resulting in more frequent knock-out cycles. This will lead to an increase in the opportunity for investors to receive their principal back faster. Due to the higher chance of knocking out according to the above mechanism.

Average interest rate of FCNs issued and offered by securities companies. Bualuang throughout 2566 is equal to 12.66% per year. The results of customers' FCN investments in 2566 have a proportion of getting back in cash as high as 70%, even though the Thai stock market has dropped by more than 15%, reflecting that investing in FCN through Close guidance and consultation of professional investment advisors with experience and understanding of the different needs of each investor.

as well as designing investment products that meet the needs of investors and correspond with changing stock market conditions. Including being able to design conditions to suit the expected investment needs and acceptable risks of each investor, making FCN another investment option that helps manage sustainable wealth for investors.

For Equity Linked Note Plus (ELN Plus), it is a new type of short-term investment tool for 1 week. which is designed to meet the needs of investors who already want to buy stocks at market prices But they do not have a strategy for short-term trading, speculating in a day or 1-2 days, and are of the view that within a week's time the stock price should not be in a hurry to rise.

Therefore, even if the stock price is at the point where you want to buy, But there is no need to rush to buy it, so ELN Plus was created to meet such situations. You can choose to wait to buy the stocks you like at the right price. During the 1 week wait, you will receive a relatively high return in the form of cash interest on the contract expiration date.

If the closing price of the underlying stock on the contract expiration date is higher than or equal to the price on the contract opening date, investors will receive the full principal amount plus cash interest. But if the closing price of the underlying stock on the contract expiration date is lower than the price on the contract opening date, the investor will receive an amount of reference stock equal to the purchase price at the contract opening price. with cash interest as well

It can be seen that at the end of 1 week, investors will always receive cash interest. Regardless of whether the principal is redeemed in cash or the underlying shares. The average interest rate of ELN Plus issued and offered by Bualuang Securities throughout 2566 is 34.70% per year.

Mr. Bannarong said From the current Thai stock market situation, there are still pressure factors and there is still no significant positive force to drive the market. As a result, the Thai stock market may still be in a sideway pattern of plus and minus, with light trading volumes.

Therefore, FCN and ELN Plus are one of the options that can be designed to suit each investor in seeking returns during a period of directionless stock market with supportive factors appropriate to their expectations and acceptable risk. However, FCN and ELN Plus products are instruments without principal protection.