Category Investments

Investec Capital Markets launches unique equity-linked investment

06 July 2010 Investec Capital Markets

Investec Capital Markets have launched China Seas Basket Limited (“CSBL”); a company incorporated in Guernsey and listed on the Bermuda Stock Exchange that will issue Australian Dollar (AUD) denominated ordinary shares. CSBL’s objective is to offer investors an equity-linked investment that provides principal protection and geared exposure to high volatility, low inflation indices.

China Seas Basket Limited will provide 100% AUD principal protection through an investment in Investec Bank plc senior debt. At maturity of the investment and on redemption of the ordinary shares, the investor will receive at least the original investment amount regardless of market conditions. In addition, the client will also earn at least 125% of the full positive growth in an equity-linked security of an equally weighted basket of Asian indices. The basket will comprise the MSCI Singapore, MSCI Taiwan, Kospi200 Korean and Hang Seng indices. The equity exposure will be provided by a foreign bank with a minimum international S&P A rating.

Japie Lubbe of Investec Capital Markets said: “This investment offers high net worth investors and institutional investors the opportunity to diversify their assets. Our track record on existing shares shows that they perform better on a mark to market basis compared with the indices targeted. Furthermore, the shares provided excellent protection during the recent collapse of global equity markets.”

Ordinary shares in China Seas Basket Limited have a targeted five year life (which can be extended to a maximum period of 6 years, the exact period will be determined on the trade date) and provision is made for liquidity in the shares. Subscription for the ordinary shares commenced on 28 June 2010 and will close on 27 August 2010 with an anticipated trade date of 1 September 2010.

A minimum investment of AUD 30,000 at the subscription price of AUD 1,000 per share is required, using one of the following offshore investment avenues:

- R4 million offshore allowance;

- Disclosed amnesty assets and disclosed foreign assets;

- International assets held by non-South African investors; or

- Cash transfer facility (asset swap).

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