20161122-三星证券-Two_years_on_the_books_11页_717kb

ETN Monitor Summary

Core Content

The document provides an overview of the ETN (Exchange-Traded Notes) market in South Korea, highlighting the market's growth, trading patterns, and the performance of various ETN products. It outlines the current state of the market, the factors influencing trading volume and actual sales, and the implications for future development.

Main Points

Market Growth

• The South Korean ETN market was launched on November 17, 2014, with 10 products, and has grown to include 130 products as of 2016.
• Total market cap reached KRW3.2 trillion, a seven-fold increase from KRW460 billion at the end of 2014.
• Despite the growth in market cap, trading volume has remained stagnant since the end of 2015.

Trading Volume and Actual Sales

• The majority of trading volume is concentrated in a small number of products, with the top 10 products accounting for over 80% of the trading.
• Actual sales, which reflect investor demand, show a different distribution, with commodity ETNs making up about 50% of actual sales.
• Domestic equity ETNs dominate daily transaction volume, but are often used for short-term profit taking, while commodity and overseas equity ETNs are held for longer periods.

Product Diversification

• The market has seen an increase in the number of products based on diverse asset classes, including domestic equity, forex, commodities, and real estate.
• New products, such as those based on non-equity and forex, have shown increased trading activity during periods of market volatility, such as after the Brexit vote.

Performance Highlights

• Certain products have shown strong returns, such as the Shinhan Copper Futures ETN(H) 18 with a one-month return of 17.74%.
• The performance of ETNs varies by underlying asset type, with US large-cap value stocks and commodity-based products showing notable returns.
• High volatility in the US dollar and European currencies has influenced the performance of forex-related ETNs.

Liquidity Factors

• Liquidity indicators show that a few products dominate the market, and new listings alone may not significantly improve market depth.
• The document emphasizes the need for more strategic product development and marketing to enhance market growth and liquidity.

Key Information

Top 10 Traded ETNs by Monthly Trading Volume

• The top 10 products account for over 80% of trading volume, with a significant skew toward established products.
• Only 15 products have actual sales exceeding KRW1 billion, and the top 2 products have seen a 60% increase in trading volume.

Top 20 ETNs by Actual Sales

• Commodity and overseas equity ETNs are significant contributors to actual sales, with commodity ETNs accounting for nearly half.
• The top 20 ETNs include products such as Shinhan Leverage WTI Futures ETN(H) 19 and Samsung KTOP30 ETN 13.

Asset Type Distribution

• Domestic equity ETNs are the most traded, but commodity ETNs have shown a strong increase in actual sales.
• The market has seen a rise in the number of products based on alternative investments such as forex and real estate.

New Product Listings

• In 2016, 53 new ETNs were listed, which is lower than the 67 listed in 2015.
• New products include those based on specific sectors, such as agriculture, alternative energy, and OLED, as well as inverse and leverage products.

Market Outlook

• The market is expected to see continued growth in the number of products, but trading volume growth remains limited.
• Political uncertainties and currency fluctuations are expected to drive demand for specific ETNs, such as those focused on DMs (dividend and low volatility) and EMs (forex-hedged).

Conclusion

The South Korean ETN market has experienced significant growth in terms of market cap, but liquidity and trading volume have not kept pace. There is a concentration of trading activity in a few products, and actual sales are more evenly distributed across asset types. The market is showing a trend toward more diverse underlying assets, and there is potential for growth in specific areas such as commodities and alternative investments. However, strategic product development and marketing are necessary to enhance market depth and attract a broader range of investors.