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Currency Linked Deposits

Scenario Analysis

Illustrative Examples of CLD

Deposit Currency and Principal HK$500,000
Linked Currency NZD
Deposit Tenor 1 week
Interest Rate 26.78%
Conversion Rate 6.2782

Normal Time Deposit

Principal Deposit Tenor Interest Rate (% p.a.) Interest Return Total Proceeds at Maturity
HK$500,000 1 week 0.01% HK$0.96
= HK$500,000 X 0.01% X 7 ÷ 365
HK$500,000.96
= HK$500,000 + HK$ 0.96

CLD in Different Market Scenarios

 
  Scenario 1 - Best Scenario Scenario 2 - Middle-of-the-road Scenario Scenario 3 - Loss Scenario
Theoretical Foreign Exchange Market on the Maturity Date NZD strengthens against HKD NZD weakens slightly against HKD NZD weakens significantly against HKD
Fixing Rate 6.2821 (Higher than Conversion Rate) 6.2688 (Lower than Conversion Rate) 6.2140 (Lower than Conversion Rate)
Principal HK$500,000
Interest Return Calculation HK$2,567.95
= HK$500,000 X 26.78% X 7 ÷ 365
Total Proceeds at Maturity HK$502,567.95
= HK$500,000 + HK$2,567.95
NZD80,049.69
= (HK$500,000 + HK$2,567.95) ÷ 6.2782 (Conversion Rate)
Total Proceeds in Deposit Currency on Maturity Date at Fixing Rate N/A HK$501,815.50
= NZD80,049.69 X 6.2688 (Fixing Rate)
HK$497,428.77
= NZD80,049.69 X 6.2140 (Fixing Rate)

Illustrative Diagram


Scenario 4 - Worst Case Scenario

If there is a substantial depreciation in the market value of the Linked Currency, the principal and interest to be repaid in the Linked Currency on the Maturity Date may become valueless. In the worst case, investors could lose the entire principal amount.

Scenario 5 - The Bank Becomes Insolvent or Defaults on Its Obligations

If the Bank becomes insolvent during the tenor of this product or defaults on its obligations under this product, investors could lose the entire principal amount and become an unsecured creditor of the Bank, regardless of the performance of the Linked Currency.

Note: The examples shown are for illustration only and shall not constitute any representation or guarantee by the Bank in respect of any possible gains or losses.

 

 

Risk Disclosure Statement

 

The above is an illustration example and only for the ease of your understanding of our products. The actual amount shall depend on the actual amount of investment involved.

The above information is for reference only and does not constitute any offer or solicitation to subscribe or redeem. The price of investment products can go up or down. Investment involves risk. Any past performance figures shown are not indicative of future performance. Investors should refer to relevant investment product offering documents for detailed information, as well as Risk Disclosures, prior to any investment product subscription. If investors have any doubt about this material or any relevant offering document, they should seek independent professional advice.

Important Notes

  • This webpage has not been reviewed by the Securities and Futures Commission or any other regulatory authorities in Hong Kong.
  • This product is a structured investment product, and is NOT protected by the Deposit Protection Scheme in Hong Kong.
  • CLD is a structured investment product that involves derivatives. The decision to invest is yours but you should not invest in this product unless the intermediary selling it has explained to you that the product is suitable for you having regard to your financial situation, investment experience and investment objectives.
  • You should be aware that CLD is affected by exchange rate fluctuations, which may cause a loss of principal.
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