FOR cautious investors hoping to make gains in equities without risking their shirts if things go wrong, Peregrine Strategy offers a new note.
The 'principal guarantee zero coupon' Hang Seng Index-linked notes due in 1997 sound pretty complicated.
What the notes do is provide exposure to Hang Seng Index movement while ensuring the initial investment is available to be paid back if things do not go right.
The $500 million note is split. Half offers the cautious investor 100 per cent of principal back at the end of the life of the note should the index close below the strike level.
On the upside, in the event the Hang Seng Index makes gains over the life of the note, the investor benefits from a 65 per cent participation in the equity index movement.
The graph and table show the note for cautious investors has no downside in respect of the principal.
