1）Foreign Exchange
We offer different foreign exchange investment tools for clients – Spot & Forward Trading and Currency Swap. These investment tools could be used by our clients to generate profits from foreign exchange trading and hedging against market fluctuations. Our trading currencies include USD, EUR, JPY, GBP, CHF, CAD, AUD, NZD and SGD.
► RMB Exchange
We offer RMB exchange services (Spot and Forward) to help customers effectively hedge against the exchange rate risk.
► Spot Transaction
Buying one currency with a different currency. The standard settlement time frame is two days from the date of trade execution.
► Forward Transaction
Buying one currency with a different currency for future delivery.
► Swap Transaction
A purchase and sale of identical amounts of one currency for another with two different value dates.
2）RMB Non-deliverable Forward
A foreign exchange forward contract which is settled in US dollar and the profit and loss is the difference between contract rate and spot rate at the time on the settlement date. It is a tool for hedging of exposure to RMB and USD foreign exchange risks and fluctuations.
Example 1: Customer buy USD , sell RMB
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Customer expects RMB will depreciate against USD in the future OR Customer wants to hedge against exchange rate risk of his import business.
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Contract Date: 19th March 2012
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Tenor: 1 Year
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Valuation Date: 15th March 2013, Settlement Date: 19th March 2013
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Forward Rate : 6.3280
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Norminal Value: USD 500,000
Scenario 1
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The spot rate of valuation rate |
USD 1 against RMB 6.3220 (RMB appreciates against USD) |
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Settle amount |
USD 500,000 X (6.3220-6.3280)/6.3220 = (USD474.53) |
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Customer will lose USD474.53 on the settlement date |
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Scenario 2
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The spot rate of valuation rate |
USD 1 against RMB 6.3330 (RMB depreciates against USD) |
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Settle amount |
USD 500,000 X (6.3330-6.3280)/6.3220 = USD394.76 |
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Customer will gain USD349.76 on the settlement date |
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Example 2: Customer sell USD , buy RMB
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Customer expects RMB will appreciate against USD in the future OR Customer wants to hedge against exchange rate risk of his export business.
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Contract Date: 19th March 2012
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Tenor: 6-month
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Valuation Date: 17th Sept 2012, Settlement Date: 19th Sept 2012
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Forward Rate : 6.3200
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Norminal Value: USD 500,000
Scenario 1
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The spot rate of valuation rate |
USD 1 against RMB 6.3120 (RMB appreciates against USD) |
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Settle amount |
USD 500,000 X (6.3200-6.3120)/6.3120 = USD633.71 |
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Customer will gain USD633.71 on the settlement date |
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Scenario 2
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The spot rate of valuation rate |
USD 1 against RMB 6.3290 (RMB depreciates against USD) |
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Settle amount |
USD 500,000 X (6.3200-6.3290)/6.3290 = (USD711.01) |
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Customer will lose USD711.01 on the settlement date |
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3）Bonds Investment and Certificates of Deposit
In pursuit of excellence for our customers, we provide a broad range of bond trading and investment services so as to help our customers hedge against the interest rate fluctuations, locking in the cost of debt or capital gains.
► Bond Investment
Bonds can be issued by the governments, business corporations or banks in a region or in various countries. Duration can last from one month to several years, and the interest rates include fixed, floating, structured, and to be settled on a pre-set date.
► Certificates of Deposit
Certificates of deposit is issued by approved institutions or banks which include fixed-rate and floating rate. Certificates of deposit is a kind of investment tools which provides higher returns than time deposits. Customers could access a specific interest at a scheduled time and get their principal back at maturity.
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Risk Disclosure Statements The foreign exchange rates or prices of securities fluctuate, and sometimes dramatically. The foreign exchange rates or prices of securities may move up or down, and even may become valueless. It is likely that losses will be incurred rather than profit will be made as a result of buying and selling securities. Certificates of Deposit is not a protected deposit and is not proected by the Deposit Protection Scheme in Hong Kong. Unless you fully understand and be willing to take risks, you should not invest in this product. In addition, the performance of certificates of deposit is affected by the actual and expected borrowing capacity of the issuers. There is no guarantee that the issuer of the certificates of deposit will not default. If the issuers of certificates of deposit default on the contracts, holders of certificates of deposit may not be able to recover interests and principals. RMB non-deliverable forward does not guarantee a return of principal and it should not be used for speculation. If the exchange rate changes before the trading is settled, customers need to bear foreign exchange risk. The investment decision is made by yourself. You should not invest in the product unless the financial intermediaries have pointed out that the product is suitable for you and explained the purposes and mechanisms of the investments. If you do not know whether the investment product is suitable for you, you should not subscribe for the product. |
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Disclaimer This information should not be regard as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. The information contained herein is not intended to provide professional advice and should not be relied upon in that regard. You are advised to obtain appropriate professional advice where necessary. The information is subject to change without notice. |