Equity Linked Investment

Equity Linked Investment (ELI) offers you the chance to earn a relatively higher potential return than a time deposit, helping you to grasp investment opportunities and increase your wealth.

ELIs are structured investment products embedded with derivatives whose investment returns are linked to the performance of the reference asset. The reference asset can be shares in a company or units in a fund listed on the Stock Exchange.

You will make a pre-determined gain and receive the principal amount in cash upon maturity if the closing price of the reference asset on the final valuation date (final price) is at or above a pre-determined price (strike price). However, you will be obliged to buy the reference asset (or the worst performing asset in a basket, as applicable) from the issuer at the strike price if the final price of the reference asset is below the strike price.

Details of ELI

Currency	HKD, USD or other non-restricted and freely convertible currencies
Reference asset(s)	Major stocks listed on the Stock Exchange of Hong Kong Limited
Investment period	1 year or below

Fees and Charges

Services	Fees
Subscription fee	Nil
Collection of distribution amount	Nil
Settlement in cash on expiry	Nil
Settlement in physical stock on expiry	Stamp duty Deposit charge (waived)* CCASS charge (waived)*

*The Bank may change the above fees from time to time. Please refer to the Bank Service Charges for details.

Note:

1. For the details of this product, please contact our staff at the Investment Services Section of our branches.
2. The above information does not constitute an offer, an invitation or a solicitation for an application or offer to invest in the ELI or enter into any transaction by any person, or a recommendation to invest in the ELI or enter into any transaction. The above information is your information only and you should not make investment decisions based on this information.
3. The Chinese version of this section is for reference only and if there is any discrepancy between the English and Chinese version, the Chinese version shall

The risk factors associated with ELI set out below are generic in nature and do not purport to disclose or discuss all the risks associated with a particular ELI for which you are going to invest. You should read the other risk factors set out in the offering document(s) in order to understand the specific risks relating to the ELI(s) you are going to invest.  If you are in doubt about the nature of or the risks associated with this investment product, you should obtain necessary and appropriate professional advice before investing in this product.  Unless otherwise stated, the risk factors set out below shall be considered as applicable to ELI.

Structure Product – The ELI is an unlisted structured investment product embedded with derivatives, it is not equivalent to and should not be treated as a substitute for conventional time deposits.

Not a protected deposit – The ELI will not be included in the Deposit Protection provided by the Macao SAR Government.

Not capital protected – The ELI is not capital protected. You may receive the Underlying Share instead of the Investment Amount at maturity depending on the Final Closing Price of the Underlying Shareon the Fixing Date.  The market value of the Underlying Share you receive may be substantially less than your Investment Amount or may even become worthless. In the worst case scenario, you could lose all of your Investment Amount.

Capped maximum potential gain – The amount of maximum potential gain under the ELI is capped and limited to the pre-determined Interest Amount even if your view on the market movement of the Underlying Share is correct.

Credit Risk – The ELI is NOT secured on any of our assets or any collateral.  The settlement of the ELI is subject to the credit and insolvency risks of the Bank.  If the Bank becomes insolvent or defaults on its obligations under the ELI, you can only claim as an unsecured creditor of the Bank regardless of the performance of the Underlying Share and the terms of the ELI. In the worst case scenario, you could lose all of your Investment Amount.

Not the same as investment in the Underlying Share – Investing in the ELI is not the same as investing in the Underlying Share. You have no right in the Underlying Share. Movements in the market price of the Underlying Share may not lead to any corresponding change in the market value of the ELI. 

Liquidity risk – The ELI is designed to be held until maturity.  The ELI is not listed on any exchange and is not transferable.  Any termination, cancellation or withdrawal prior to maturity is subject to the consent of the Bank.  You may incur significant costs or losses as a result of early termination, cancellation or withdrawal.

Exposure to market price movement of the Underlying Share after the Fixing Date – Your settlement at maturity will be determined on the Fixing Date but settlement will only occur on the Maturity Date. If we are to deliver the Delivery Amount, you will not be able to sell such Delivery Amount until it is delivered to you on the Maturity Date and will be exposed to any market price movement of the Underlying Share between the Fixing Date and the Maturity Date. If you decide to hold the number of the Underlying Share delivered to you on the Maturity Date, you will be further exposed to the market risk of holding the Underlying Share from the Maturity Date until you sell the Underlying Share.

Adjustment and Early Termination - If an unforeseeable event occurs, the issuer may, at its sole and absolute discretion, adjust the terms of ELI to account for that event.  Moreover, ELI may be early terminated by paying you a fair market value as the issuer may determine.  Such adjustment and/or early termination may have an unforeseen adverse impact on the potential return of your investment and the amount payable to you may be substantially less than your original investment amount.

For ELI Linked to Exchange Traded Fund (ETF) and/or Real Estate Investment Trust (REIT) - ETF and REIT are managed by their managers.  The performance of the assets of ETF / REIT is significantly dependent upon the capabilities of the management team of the manager.  The investment objectives and/or investment restrictions of ETF / REIT may be changed from time to time.  If a ETF adopts an investment objective to track the performance of an Underlying Share asset pool or index, it is exposed to the political, economic, currency and other risks related to the Underlying Share asset pool or index that the ETF is designed to track.  There may also be disparity between the performance of the ETF and the performance of the Underlying Share asset pool or index that the ETF is designed to track.  On the other hand, REIT is exposed to risks relating to investments in real estate and there may also be disparity between the market price of the units of a REIT and the net asset value per unit.

Conflicts of interest – Potential and actual conflicts of interest may arise from the different roles played by us, our subsidiaries and affiliates in connection with the ELI. Although our economic interests in each role may be adverse to your interests in the ELI, we maintain regulatory required information barriers between our different business areas as well as policies and procedures designed to minimize and manage such conflicts of interest to comply with applicable laws and regulations, and to ensure those transactions or dealings will be transacted at arm’s length. 

Suitability - This is a structured 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 this product is suitable for you having regard to your financial situation, investment experience and investment objectives.