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Currency Linked Investments – Dual Currency Investment

Important Notes
  1. This is a structured investment product involving derivatives. The investment decision is yours but you should not invest in this product unless the intermediary who sells it to you has explained to you that the product is suitable for you having regard to your financial situation, investment experience and investment objectives.
  2. This product is not principal protected. You may lose all or part of your Principal Amount and Interest Amount.
  3. Before making any investment decision, you should assess your own financial situation, investment experience, investment objectives, willingness and ability to bear risks, and understand the nature and risks of the product. If in doubt, you should seek advice from independent financial advisers.
  4. This promotional material is for reference only. It is not and does not constitute any offer, solicitation or recommendation to buy, sell or provide any investment product or service.
  5. This promotional material is issued by Nanyang Commercial Bank, Limited. The contents of this promotional material have not been reviewed by any regulatory authority in Hong Kong.
  6. This product is not a protected deposit and is not protected by the Deposit Protection Scheme in Hong Kong.

Product Features

Nanyang Commercial Bank, Limited (the “Bank”) Currency Linked Investments – Dual Currency Investment is a currency-linked investment product. According to your personal investment preference and outlook on currency exchange rate, and depending on the performance of the currencies, you have the opportunity to earn a higher potential return, or to buy the Linked Currency at a predetermined conversion rate.

Various Currency Combinations

You can choose any 2 currencies from HKD, USD, CNY+, AUD, NZD, GBP, CAD, EUR, and JPY to form a currency pair*, which allows you to stay up to date with the market and grasp the investment opportunity.

*
Excluding the currency pair of USD /HKD
+
Where the Investment Currency or Linked Currency is CNY, you should note that the Bank will use the relevant offshore CNH exchange rate

Flexible Investment Choices

The Investment Period varies from 1 week, 2 weeks, 1 month, 3 months to 6 months, with the Principal Amount of as low as HKD50,000 or its equivalent in another currency. This provides flexible choices for your various investment needs.

Multiple Trading Channels

The Bank provides multiple trading channels, including designated branches, Internet Banking and Manned Investment Trading Hotline.

Trading Channel Service Hours
Branch: Mondays to Fridays*, 9:00 a.m. – 5:00 p.m.
Internet Banking: Mondays to Fridays*, 9:00 a.m. – 7:00 p.m.
Manned Investment Trading Hotline: Mondays to Fridays*, 9:00 a.m. – 5:00 p.m.

*Except public holiday

How it works

When entering into a Dual Currency Investment contract with the Bank, you need to select:
1) Investment Currency, 2) Principal Amount, 3) Linked Currency and 4) Investment Period
Based on the above information, the Strike Price and the Premium Interest Rate will be agreed between you and the Bank accordingly.

Settlement on the Maturity Date

On the Maturity Date, the Spot Price^ will be compared with the Strike Price#:

  1. If the Linked Currency remains unchanged or appreciates against the Investment Currency, the Principal Amount together with the Interest Amount will be paid to you in the Investment Currency
  2. If the Linked Currency depreciates against the Investment Currency, the Principal Amount together with the Interest Amount will be converted to the Linked Currency at the Strike Price# and paid to you
^
The Spot Price refers to the spot exchange rate quoted by the Bank at 2:00 p.m. on the relevant Maturity Date.
#
The Strike Price means the exchange rate of the chosen Currency Pair agreed between you and the Bank when you enter into a Currency Linked Investments Contract with the Bank.

Illustrative Example (Note)

Investment Currency: HKD
Linked Currency: AUD
Investment Period: 1 week
Strike Price: 7.8000 (AUD/HKD)
Principal Amount: HKD100,000
Premium Interest Rate: 12.00% p.a.

Scenario Analysis (Note)

Gain Scenario
AUD appreciates
against HKD		 Break-even Scenario
AUD slightly
depreciates
against HKD		 Loss Scenario ++
AUD depreciates
against HKD
Spot Price (AUD/HKD)
quoted at the Maturity Time		 7.9000 7.7821 7.7500
Principal Amount + Interest
Amount receivable on the Maturity Date		 HKD 100,230.14 AUD 12,850.02 AUD 12,850.02
HKD equivalent
(calculated at the Spot Price
quoted at the Maturity Time)		 HKD 100,230.14 HKD 100,000.00 HKD 99,587.66
Investment Return Gain
HKD 230.14		 0 Loss
HKD412.34
Annual rate of return# 12.00% 0% -21.50%

++Worst-case Scenario
If the exchange rate of AUD/HKD is zero, your investment would become worthless. You would lose all of your Principal Amount and Interest Amount.

#The annual rate of return of HKD is calculated on a 365-day basis. In addition, the annual rate of return is NOT equivalent to, nor should it be treated as actual returns.
Note: The above Illustrative Example and the Scenario Analysis are prepared with hypothetical data, and are not based on the past performance of the currencies as stated herein. They are for reference only and do not guarantee or represent the final returns of Dual Currency Investment. The above hypothetical examples should not be relied on as an indication of the actual performance of the Linked Currency or this product. You should not rely on these examples when making an investment decision.

This product is subject to the relevant terms and conditions. For details, please contact our branch staff.

The following risk disclosure statements cannot disclose all the risks involved. Prior to trading or investment, you should collect and study the information required for your investment. Please refer to the relevant offering documents for the details of its risk factors. You should carefully consider whether trading or investment is suitable in light of your own financial position and investment objectives. You should seek independent financial and professional advice before trading or investment. If you are uncertain of or have not understood any aspect of the following risk disclosure statements or the nature and risks involved in trading or investment, you should seek independent advice.

Risk Disclosure
Risk Disclosure Statement on Currency Linked Investments – Option Linked Investment (“this product”):
  • Not a time deposit – A Dual Currency Investment is NOT equivalent to, nor should it be treated as a substitute for, time deposit. It is NOT a protected deposit and is NOT protected by the Deposit Protection Scheme in Hong Kong.
  • Derivatives risk – A Dual Currency Investment is embedded with a FX Option. Transactions involving options involve a high degree of risk. Movements in exchange rates may in the worst case result in your losing the entire Principal Amount and interest amount. By investing in this product, you accept a legal obligation to settle the Option in the Linked Currency which will be a weaker currency then, if the Option is exercised against you on the maturity date, however far the exchange has moved away from the Strike Price.
  • Limited potential gain – The maximum potential gain is limited to the interest amount calculated based on the Premium Interest Rate which is set out in the contract.
  • Maximum potential loss – A Dual Currency Investment is not principal protected. In the worst case scenario, you could lose all of the Principal Amount and the interest amount.
  • Not the same as buying the Linked Currency – Investing in a Dual Currency Investment is not the same as buying the Linked Currency directly. During the Investment Period, you have no rights in the Linked Currency, and movements in the market price of the Linked Currency may not lead to any corresponding change in the performance of a Dual Currency Investment.
  • Market risk – The return of a Dual Currency Investment is linked to the exchange rates of the Linked Currency. Movements in exchange rates can be unpredictable, sudden and drastic, and affected by complex political and economic factors. You will be taking the risk of suffering loss due to the fluctuations of the exchange rates.
  • Liquidity risk – A Dual Currency Investment is designed to be held till maturity. Once the transaction for this product is confirmed, no partial or full withdrawal will be allowed before maturity except with our consent.
  • Credit risk of the Bank – A Dual Currency Investment is not secured by any collateral. If you invest in this product, you will be taking the credit risk of the Bank. If the Bank becomes insolvent or defaults on its obligations under this product, you can only claim as an unsecured creditor of the Bank. In the worst case, you could suffer a total loss of your Principal Amount and the potential interest amount.
  • Currency risk – If the Investment Currency and/or Linked Currency is/are not your home currency, and you choose to convert it back to your home currency, or if you receive the Linked Currency and choose to convert it back to the Investment Currency upon maturity, you should note that exchange rate fluctuations may have an adverse impact on, and the potential loss may offset (or even exceed), the potential return of the product.
  • RMB Conversion Limitation Risk (if applicable) – RMB investments are subject to exchange rate fluctuations which may provide both opportunities and risks. The fluctuation in the exchange rate of RMB may result in losses in the event that the customer converts RMB into HKD or other foreign currencies.
    (Only applicable to Individual Customers) RMB is currently not fully freely convertible. Individual customers can be offered CNH rate to conduct conversion of RMB through bank accounts and may occasionally not be able to do so fully or immediately, for which it is subject to the RMB position of the banks and their commercial decisions at that moment. Customers should consider and understand the possible impact on their liquidity of RMB funds in advance.
    (Only applicable to Corporate Customers) RMB is currently not fully freely convertible. Corporate customers that intend to conduct conversion of RMB through banks may occasionally not be able to do so fully or immediately, for which it is subject to the RMB position of the banks and their commercial decisions at that moment. Customers should consider and understand the possible impact on their liquidity of RMB funds in advance.