FOR ACCREDITED AND INSTITUTIONAL INVESTORS LEONTEQ | STRUCTURED PRODUCTS 101

STRUCTURED PRODUCTS

STRUCTURED PRODUCTS 101 PETER WILLIAMS DIRECTOR | LEONTEQ SECURITIES (SINGAPORE) PTE. LTD MALAYSIA WEALTH MANAGEMENT FORUM MALAYSIA | 25TH JUNE 2015

JUNE | 2015

FOR ACCREDITED AND INSTITUTIONAL INVESTORS LEONTEQ AG | RESULTS PRESENTATION H1 2014 LEONTEQ | STRUCTURED PRODUCTS 101

AGENDA • STRUCTURED PRODUCTS & THE SWISS DERIVATIVES MAP - Why Structured Products - Swiss Derivatives Map - Key Terminology • STUCTURED PRODUCTS PAYOFFS - Fixed Coupon Note - Bonus Certificate - TWIN WIN Autocall • QUESTIONS & ANSWER

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FOR ACCREDITED AND INSTITUTIONAL INVESTORS LEONTEQ | STRUCTURED PRODUCTS 101

FOR PROFESSIONAL INVESTORS ONLY FOR ACCREDITED AND INSTITUTIONAL INVESTORS UPGRADE TO LEONTEQ | CREATING A NEW INVESTMENT EXPERIENCE LEONTEQ | STRUCTURED PRODUCTS 101

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STRUCTURED PRODUCTS & THE SWISS DERIVATIVES MAP

FOR ACCREDITED AND INSTITUTIONAL INVESTORS LEONTEQ | STRUCTURED PRODUCTS 101

WHY STRUCTURED PRODUCTS? • Client may design products with theirs own risk-return preferences • Facilitate highly customized payoff objectives • Adapted to individual market expectation • Involve long and short positions • Leverage effects

TAKE ADVANTAGE OF MARKET OPPORTUNITIES

CRUDE OIL 140 120 100 80 60 40 20 0 2010

2011

2012

2013

2014

Source: Leonteq 2015. Historic data is not a reliable indicator for future development.

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2015

FOR ACCREDITED AND INSTITUTIONAL INVESTORS LEONTEQ | STRUCTURED PRODUCTS 101

RISK vs. REWARD

High returns

Moderate returns

Low returns Low risk

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Moderate risk

High risk

DE-LEVERAGE

INVESTMENT

LEVERAGE

• Reduced downside risks & upside returns • Full or partial capital protection

• Simple exposure to underlying asset • Provides investors with a moderate risk-return profile

• Magnification of potential upside returns • Capital at risk

FOR ACCREDITED AND INSTITUTIONAL INVESTORS LEONTEQ | STRUCTURED PRODUCTS 101

REVERSE CONVERTIBLE

Leverage Participation

Profit

Yield Enhancement

Cap Barrier

Capital Protection

0

Strike

er

ly

in

g

Risk nd

Product

U

Loss

BONUS CERTIFICATE

TWIN WIN

Profit

Profit

Barrier Barrier

0

0

Strike

6

nd

Product

Loss

U

Loss

nd

er

ly

er

in

ly

g

in

g

Strike

U

Return

CLASSIFICATION MOST POPULAR PAYOFF IN IFA UNIVERSE

Product

FOR ACCREDITED AND INSTITUTIONAL INVESTORS LEONTEQ | STRUCTURED PRODUCTS 101

KEY TERMINOLOGY

PAYOFF TYPES

PRODUCT CHARACTERISTICS

tificate • Fixed Coupon Note (FCN) • TWIN WIN

coupon • Memory Coupon / Non Memory • AutoCall Trigger • Phoenix • Athena • Participation

POPULAR BARRIER TYPES

DATE TERMINOLOGY

• Reverse Convertible • Barrier Reverse Convertible • Multi Barrier Express Cer-

• European

Barrier: Worst Of • European Barrier: Sum Of • American Barrier (Continuous / Daily on Close)

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• Conditional/Guaranteed

• Strike

Date (Initial Fixing) • Issue Date • Observation Dates • Maturity Date (Final Fixing)

FOR ACCREDITED AND INSTITUTIONAL INVESTORS LEONTEQ | STRUCTURED PRODUCTS 101

FOR ACCREDITED AND INSTITUTIONAL INVESTORS LEONTEQ | STRUCTURED PRODUCTS 101

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STRUCTURED PRODUCT PAYOFFS

FOR ACCREDITED AND INSTITUTIONAL INVESTORS LEONTEQ | STRUCTURED PRODUCTS 101

YTD MOST POPULAR REQUESTED UNDERLYINGS From millions of Pricing requests through our Email Pricer we can review the most popular 10 underlyings by Region:

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•

Asia, Ex Japan

•

Japan

•

US

•

EU

•

Switzerland

FOR ACCREDITED AND INSTITUTIONAL INVESTORS LEONTEQ | STRUCTURED PRODUCTS 101

YTD MOST POPULAR REQUESTED UNDERLYINGS JAPAN

TOP 10 UNDERLYINGS PER REGION

US

UNDERLYING

NO. OF REQUESTS*

UNDERLYING

NO. OF REQUESTS*

SEVEN & I HOLDINGS CO LTD

39

CITIGROUP INC

208

SOFTBANK CORP

35

ALIBABA GROUP HOLDING-SP ADR

190

DENSO CORP

25

BANK OF AMERICA CORP

164

JAPAN TOBACCO INC

24

APPLE INC

160

MITSUBISHI UFJ FINANCIAL GRO

18

UNITED STATES OIL FUND LP

104

NOMURA ETF - NIKKEI 225

17

GOOGLE INC-CL A

99

TOYOTA MOTOR CORP

14

GENERAL ELECTRIC CO

71

HONDA MOTOR CO LTD

14

JPMORGAN CHASE & CO

70

SONY CORP

13

STARBUCKS CORP

59

SUMITOMO MITSUI FINANCIAL GR

8

AMAZON.COM INC

58

EU

* each underlying is counted only once per email received by EMP Source: Leonteq Securities AG 2015

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SWITZERLAND

UNDERLYING

NO. OF REQUESTS*

UNDERLYING

NO. OF REQUESTS*

BNP PARIBAS

66

NESTLE SA-REG

48

SANOFI

54

ROCHE HOLDING AG-GENUSSCHEIN

40

KONINKLIJKE PHILIPS NV

35

NOVARTIS AG-REG

29

DAIMLER AG-REGISTERED SHARES

31

UBS AG-REG

27

DEUTSCHE BANK AG-REGISTERED

31

SWATCH GROUP AG/THE-BR

16

VOLKSWAGEN AG-PREF

30

SWISS RE AG

14

LVMH MOET HENNESSY LOUIS VUI

28

CIE FINANCIERE RICHEMON-REG

13

STANDARD CHARTERED PLC

27

UBS GROUP AG-REG

13

BAYERISCHE MOTOREN WERKE AG

27

CREDIT SUISSE GROUP AG-REG

10

BARCLAYS PLC

20

SWISS LIFE HOLDING AG-REG

7

FOR ACCREDITED AND INSTITUTIONAL INVESTORS LEONTEQ | STRUCTURED PRODUCTS 101

YTD MOST POPULAR REQUESTED UNDERLYINGS ASIA EX JAPAN UNDERLYING IND & COMM BK OF CHINA-H CSOP FTSE CHINA A50 ETF-HKD CHINA CONSTRUCTION BANK-H TENCENT HOLDINGS LTD BANK OF CHINA LTD-H ISHARES FTSE A50 CHINA INDEX HSBC HOLDINGS PLC PING AN INSURANCE GROUP CO-H CHINA LIFE INSURANCE CO-H AGRICULTURAL BANK OF CHINA-H

TOP 10 UNDERLYINGS PER REGION

• Underlying: TENCENT

90% • Hold: 10% • Sell: 0% • No. of Analysts: 50

NO. OF REQUESTS* 281 277 248 248 200 197 192 183 182 180

HOLDINGS LTD

• Buy:

* each underlying is counted only once per email received by EMP

Source: Bloomberg

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»

12 month Target Price: 12.40%

FOR ACCREDITED AND INSTITUTIONAL INVESTORS LEONTEQ | STRUCTURED PRODUCTS 101

Issuer

Profit

Cap Barrier

Underlying Maturity

0

Strike

Currency

in

g

Autocall Observations

ly er nd U

Loss

FIXED COUPON NOTE (FCN) 16.21%P.A. FIXED COUPON NOTE

Product

Autocall Trigger Level Coupon Strike Level Barrier Level Barrier Type Source: Leonteq Securities AG 2015

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DBS Bank Ltd (S&P, Fitch AA-, Moody’s AA1; stable outlook) TENCENT HOLDINGS LTD (700 HK Equity) 6 months USD Monthly 100% of the initial fixing 16.21% p.a., guaranteed 100% of the initial fixing 80% of the initial fixing American (observed continuously)

FOR ACCREDITED AND INSTITUTIONAL INVESTORS LEONTEQ | STRUCTURED PRODUCTS 101

FIXED COUPON NOTE (FCN) 16.21%P.A. FIXED COUPON NOTE MARKET EXPECTATION • Underlying

moving sideways or slightly rising • Falling volatility • Underlying will not breach barrier during product lifetime YIELD ENHANCEMENT

SCENARIOS • Month



»

1: Underlying is above strike price lnvestor receives 100% + 1.35%

• Month



»

1 to Month 6: Underlying between strike and barrier Investor receives 100% + (6 x 1.35%)

• Month



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»

1 to Month 6: Barrier is breached Investor receives 6 x 1.35% and is long the underlying at maturity

FOR ACCREDITED AND INSTITUTIONAL INVESTORS LEONTEQ | STRUCTURED PRODUCTS 101

BONUS CERTIFICATE 150% UPSIDE PARTICIPATION BONUS CERTIFICATE Issuer

Profit

Underlying Maturity Currency Upside Participation

Barrier

0

U

Loss

nd

er

ly

in

g

Strike

Product

Bonus Level Cap Level Barrier Level Barrier Type Source: Leonteq Securities AG 2015

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DBS Bank Ltd (S&P, Fitch AA-, Moody’s AA1; stable outlook) TENCENT HOLDINGS LTD (700 HK Equity) 6 months USD 150% of the upside performance, up to the cap level 105% of the initial fixing 125% of the initial fixing, maximum redemption is 137.5% of the initial capital 85% of the initial fixing American (observed continuously)

FOR ACCREDITED AND INSTITUTIONAL INVESTORS LEONTEQ | STRUCTURED PRODUCTS 101

BONUS CERTIFICATE 150% UPSIDE PARTICIPATION BONUS CERTIFICATE MARKET EXPECTATION • Underlying

moving sideways or rising • Underlying will not breach barrier during product lifetime SCENARIOS

PARTICIPATION

• At



»

maturity Underlying is between barrier and bonus level lnvestor receives 105%

• At

Maturity underlying is above 105% of strike price client receives Participation of 150% » E.g Underlying is up 10%: Investor receives 115% (capped at 125% x 150% = 137.50%)

• Barrier



15

»

breached during product tenor Investor is long the underlying

FOR ACCREDITED AND INSTITUTIONAL INVESTORS LEONTEQ | STRUCTURED PRODUCTS 101

FOR ACCREDITED AND INSTITUTIONAL INVESTORS LEONTEQ | STRUCTURED PRODUCTS 101

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YIELD ENHANCEMENT + PARTICIPATION = TWIN WIN

FOR ACCREDITED AND INSTITUTIONAL INVESTORS LEONTEQ | STRUCTURED PRODUCTS 101

TWIN WIN 19.50%P.A. AUTOCALLABLE TWIN WIN ON S&P GSCI CRUDE OIL Issuer

Profit

Barrier

Underlying

0

Maturity

Strike

Loss

U

nd

er

ly

in

g

Currency Product

Autocall Observations Autocall Trigger Level Coupon Strike Level Barrier Level TWIN WIN Participation Barrier Type Source: Leonteq Securities AG 2015

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EFG International (Fitch A: Stable, Moody’s A1: Stable outlook) S&P GSCI CRUDE OIL ER INDEX (SPGSCLP Index) 1 year USD Quarterly 100% of the initial fixing 19.50% p.a., Memory Coupon 100% of the initial fixing 60% of the initial fixing 100% of the upside performance 100% of the downside performance American (observed continuously)

FOR ACCREDITED AND INSTITUTIONAL INVESTORS LEONTEQ | STRUCTURED PRODUCTS 101

TWIN WIN 19.50%P.A. AUTOCALLABLE TWIN WIN ON S&P GSCI CRUDE OIL MARKET EXPECTATION • Rising

or slightly falling underlying • Underlying will not breach barrier during product lifetime Yield Enhancement + Participation = TWIN WIN

SCENARIOS • Oil



»

above strike in Q1 lnvestor receives 100% + 4.875%

• Oil

above strike in Q2 » Investor receives 100% + 9.75% (2 x Coupons)

• At

maturity, Oil up 10% » Investor receives 10% participation coupon

• At

maturity, Oil down 10% » Investor receives 10% participation coupon (capped at Barrier)

• Barrier 18

breached during product tenor » Investor is long the underlying

FOR ACCREDITED AND INSTITUTIONAL INVESTORS LEONTEQ | STRUCTURED PRODUCTS 101

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THANK YOU Q&A

FOR ACCREDITED AND INSTITUTIONAL INVESTORS LEONTEQ | STRUCTURED PRODUCTS 101

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No representation or warranty, either express or implied is provided in relation to the accuracy, completeness or reliability of the information contained herein. Before investing in financial products, investors are highly recommended to contact their financial advisor for advice specifically focused on the investor´s individual situation; the information contained in this document does not substitute such advice. Any – including only partial – reproduction of any article or picture is solely permitted based on an authorization from Leonteq Securities AG. No responsibility is assumed in case of unsolicited delivery. SINGAPORE  Leonteq Securities AG (“Leonteq”) does not carry on any activity of dealing in any securities in Singapore, and will only deal with investors in any investment product through, inter alia, (i) the holder of a capital markets services licence to deal in securities; (ii) a bank licensed under the Banking Act (Cap. 19 of Singapore); (iii) a merchant bank approved as a financial institution under the Monetary Authority of Singapore Act (Cap. 186 of Singapore), with whom Leonteq has distribution arrangements with (each, a “Distributor”). Any questions or interest that an investor may have in respect of the investment product or information set out herein must be directed to the Distributor. Leonteq Securities (Singapore) Pte. Ltd (CMS100410-2) (Address: #39-02 Asia Square Tower 1, 8 Marina View, Singapore 018960, Telephone +65 6690 5200, Facsimile +65 6690 5298) (“Leonteq Singapore”) is responsible for the distribution of this publication in Singapore. 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Where the investment product as described under this document are subscribed or purchased under Section 275 of the SFA by a relevant person which is a corporation (which is not an accredited investor), the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or a trust (where the trustee is not an accredited investor), whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor, shares, debentures and units of shares and debentures of that corporation or the beneficiaries’ rights and interest (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired the investment product pursuant to an offer made under Section 275 of the SFA except to an institutional investor or to a relevant person (as defined in Section 275(2) of the SFA) or to any person pursuant to an offer that is made on the terms as set out Section 275(1A) of the SFA; or where no consideration is or will be given for the transfer; or where the transfer is by operation of law. All investors should therefore ensure that the relevant transfer arrangements comply with the restrictions, and if necessary, should seek legal advice to ensure compliance with the above arrangement. Leonteq Singapore makes no representation that the information in this document is complete, accurate, clear, fair and not misleading. The use or reliance on any information in this document is at the purchaser’s own risk and any losses which may be suffered as a result of entering into any investment are solely for the purchaser’s account. Leonteq Singapore is not responsible or liable for the accuracy and completeness of any such information, the performance or outcome of any investment made by the purchaser after receipt of such information irrespective of whether such information was provided at the purchaser’s request, and expressly disclaims any liability, including incidental or consequential damages, arising from errors or omissions in this document. © Leonteq Securities AG 2015. All rights reserved.

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