South Korean DLS Issuance Surged 14.3% to 18.37 Trillion Won in 2024 | Be Korea-savvy

South Korean DLS Issuance Surged 14.3% to 18.37 Trillion Won in 2024


DLS products are structured to provide promised returns when underlying assets such as interest rates or exchange rates remain within specified ranges until maturity. (Photo: created by a generative AI)

DLS products are structured to provide promised returns when underlying assets such as interest rates or exchange rates remain within specified ranges until maturity. (Photo: created by a generative AI)

SEOUL, Jan. 23 (Korea Bizwire) — The Korea Securities Depository (KSD) reported on January 22 that the issuance of derivatives-linked securities (DLS) increased to 18.37 trillion won in 2024, marking a 14.3% rise from the previous year. 

DLS products are structured to provide promised returns when underlying assets such as interest rates or exchange rates remain within specified ranges until maturity. While sometimes marketed as easy high-yield investments, these complex financial products can be difficult for retail investors to understand and carry risks of principal loss if asset prices move beyond contracted ranges. 

The KSD’s figures include derivatives-linked bonds (DLB) but exclude the popular equity-linked securities (ELS). By year-end 2024, the outstanding balance of DLS investments reached 32.67 trillion won, up 14.5% from the previous year, while redemption amounts decreased 21.3% to 15.84 trillion won.

Private placements dominated the market, accounting for 60.8% of total issuance, with public offerings making up the remainder. Interest rate-linked products represented the largest segment at 12.96 trillion won (70.6% of total issuance), followed by credit-linked products at 3.27 trillion won (17.8%) and currency-linked products at 1.38 trillion won (7.5%). 

Hana Securities led the market with a 41.8% share of total issuance, followed by BNK Investment Securities (9.2%), Shinhan Investment (8.3%), Hanwha Investment Securities (7.7%), and Hyundai Motor Securities (7.4%). The KSD noted that these top five securities firms collectively accounted for 13.66 trillion won, or 74.4% of total issuance.

M. H. Lee (mhlee@koreabizwire.com) 

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