SG Issuer, Societe Generale (SocGen) group's issuing entity, and UBS, have permanently suspended the trading of daily leverage certificates (DLCs) of various Chinese tech companies on the Singapore Exchange (SGX).

On Thursday (Mar 17), SG Issuer permanently suspended the trading of JD.com's 5x Short DLCs, with counter codes DJBW and DUDW, after their underlying stock recorded a more than 20 per cent intraday rise in its share price and triggered the airbag mechanism.

JD.com is a Chinese e-commerce company and one of the largest business-to-consumer online retailers in China.

On Wednesday, SG Issuer had permanently suspended the trading of internet company Alibaba Group Holding's 5x Short DLCs, with counter codes DCMW, DCIW, DAGW and DWNW, after the airbag mechanism was triggered for the same reason.

The other permanent trading suspensions include NetEase's 5x Short DLCs with counter code DNCW and PUOW, Baidu's 5x Short DLCs with counter code DBFW, Alibaba Health Information Technology's 5x Short DLCs with counter code DYMW, Meituan Dianping's 5x Short DLCs with counter codes DARW, DFBW, DMAW and DMSW, and Kuaishou Technology's 5x Short DLCs with counter code DPAW.

UBS on Wednesday also permanently suspended the trading of Alibaba's 5x Short DLCs with the counter code JQYW, and Meituan's 5x Short DLCs with the counter code HMMW.

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The above DLCs all triggered the airbag mechanism after their underlying stocks recorded a more than 20 per cent intraday rise in their share prices.

NetEase is a Chinese internet company and online game services provider, while Baidu operates one of the largest internet search engines in China. Alibaba Health is a healthcare services platform, Meituan is a Chinese shopping platform for lifestyle services and products, while Kuaishou operates a video-sharing mobile app.

Chinese stocks have experienced weakness in the past week as sentiments were weighed down by a lockdown in tech hub Shenzhen to curb the spread of Covid-19, as well as the prospects of sanctions on China due to its relationship with Russia.

The stocks, however, saw a sudden turnaround after Beijing on Wednesday vowed to keep its stock market stable, ease a regulatory crackdown and support property and technology companies.

DLCs are financial instruments issued by third-party financial institutions and traded on the SGX, and they offer investors fixed leverage of 3 to 7 times the daily performance of the underlying stock or index.

They are classified as Specified Investment Products (SIPs) or financial products with structures and features that may be more complex than others and require more knowledge to understand.

READ MORE:

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• UBS comes on board as new DLC issuer on SGX, to list 10 new DLCs

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