[THE INVESTOR] South Korea’s issuance of derivatives-linked securities has soared to a record level during the first half of the year as the upward trend in oil and gold prices continues, data showed on July 8.

A total of 14 trillion won (US$12 billion) worth of derivatives-tied securities has been sold during the January to June period, up 3.3 percent year-on-year, according to data compiled by the Korea Securities Depository.


It is the highest half-year figure so far.

“Strengthening international crude oil prices and rebound in gold price have led to the increase of DLS issuance,” said Jeon Kyun, an analyst at Samsung Securities.

The volume of the issuance has grown rapidly during the second quarter when the figure stood at 8 trillion won.

A possible interest rate hike in the US also had led investors to turned to the derivatives market.

“Securities companies expanded the number of products linked to interest rates here and abroad in preparation for the US Fed’s benchmark rate hike,” Jeon said.

The products are structured to track the performance of underlying assets, not guarantee the principle, as investors prefer instruments that promise higher yields.

By Park Han-na (hnpark@heraldcorp.com)