Currency Linked Investment
Keep your finger on the pulse of the currency market with a currency linked investment product, which offers you the opportunity to boost your returns based on your view of future exchange rate movements.
- Tailored to your choice of currency pairs, strike rate and tenor (from 1 week to 6 months)
- Opportunities to buy your favourite currency at a pre-determined price
- Low minimum principal requirement of HK$100,000 (or its equivalent)
Please refer to the product offering documents for detailed product terms, information and risks.
How does CLI work
Assuming the AUD/HKD spot rate is trading at 6.1200 and you invest HK$500,000.
Choose your investment currency (base currency): HKD
Choose your linked currency: AUD
Agree on a strike rate: 6.0600
(the rate which you are comfortable in exchanging your investment currency for the linked currency)
Choose a tenor: 1 Month (33 days)
Based on your chosen currency pair, strike rate, and tenor, the Bank determines that the interest rate is 5.0% p.a.
On the fixing date, the prevailing exchange rate (fixing rate) will be compared against the strike rate to determine whether you will be repaid the maturity proceeds in the base currency or the alternate currency.
If you are to be repaid in the alternate currency, the strike rate will be used to convert the maturity proceeds.
1 month later on the fixing date:
AUD strengthens against HKD compared to the strike rate (e.g. AUD/HKD fixing rate is 6.1500: the fixing rate is higher than the strike rate).
You will receive your original investment + 1 month’s interest of 5.0% p.a. in HKD on maturity.
= HK$500,000 + (500,000 x 5.0% x 33 / 365)
AUD weakens against HKD compared with the strike rate (i.e. AUD/HKD fixing rate is 5.9700: the fixing rate is lower than the strike rate).
You will receive your original investment + 1 month’s interest of 5.0% p.a., converted to AUD at the strike rate of 6.0600 on maturity.
= AUD [(500,000 + 2,260.27) / 6.0600]
*When the fixing rate on the fixing date equals the strike rate, you will receive the aggregate of the investment amount and the interest in the original currency.
All figures and rates used above are for illustration purposes only. The above illustrations are not indicative of the likely or future performance of a CLI and do not cover all possible scenarios.
Risk Disclosures and Important Notice
Investment involves risks. It does not constitute any offer or solicitation of offer to subscribe, transact or redeem any investment product. Past performances are not indicative of future performances. You should carefully read the product offering documentation, the account terms and conditions and the product terms and conditions for detailed product information and risk factors prior to making any investment. If you have any doubt on this material or any product offering documentation, you should seek independent professional advice.
Foreign exchange involves risks. Customers should note that foreign exchange may incur loss due to the fluctuation of exchange rate.
RMB currently may not be freely convertible and is subject to exchange controls and restrictions. There is no guarantee that RMB will not depreciate. If you convert Hong Kong Dollar or any other currency into RMB so as to invest in a RMB product and subsequently convert the RMB sale proceeds back into Hong Kong Dollar or any other currency, you may suffer a loss if RMB depreciates against Hong Kong Dollar or other currency.
The Product is not principal protected, customer could lose the entire principal amount in the worst case scenario. The Product carries risks not normally associated with ordinary bank deposits, and is NOT equivalent to a time deposit. You should therefore not treat the Product as a substitute for ordinary savings or time deposits. The Product is NOT a protected deposit and is NOT protected by the Deposit Protection Scheme in Hong Kong.