Structured-note issuers love Samsung

Structured-note issuers worldwide are selling a record number of products tied to Samsung Electronics as Asia’s largest technology company increases its dominance in the global smartphone market.

The number of offerings jumped to 15 this year through April 23 from one during the same period in 2012, according to data compiled by Bloomberg, which doesn’t track issuance by local brokerages in Korea where Samsung is based. In all of last year, 19 such products were issued, with 10 of them sold in the fourth quarter, the data show.

Samsung Electronics reported a record quarterly profit in April for the three months ended March 31. Strategy Analytics estimated the company captured a third of the global smartphone market during the period as growth for Apple dropped to its slowest pace ever. Shares of the Galaxy maker gained 9.4 percent in Seoul trading in the past 12 months.

“Samsung is more and more popular among investors as they have been quite successful with the launch of their recent Galaxy mobile-phone series,” said Manuel Duerr, the head of sales to individual investors at EFG Financial Products AG.

The structured-product distributor in March sold $2 million in one-month notes tied to Samsung’s London-listed global depositary receipts to a client in Asia, Duerr said. The investor earned an annualized 19 percent return when the securities matured April 26, as the stock didn’t fall below the predetermined level of $655.025, he said.

The product is one of two sold this year tied solely to Samsung, while the rest are linked to baskets of stocks that include the company, Bloomberg data show. UBS AG, HSBC Holdings PLC and Credit Suisse Group AG issued the most, each selling two products, according to the data.

EFG also issued certificates in September betting on diverging movements between shares of the world’s top two smartphone sellers. The certificates earn more when Samsung GDRs outperform Apple shares by a larger margin, according to a term sheet for the securities maturing in May.

The Samsung GDRs have gained 30 percent from the closing price on Aug. 30, which was used as the initial value for the certificates, while Apple has lost 33 percent. The iPhone maker in April reported its first quarterly profit decline in a decade.

Bloomberg