Energy Prices: Nikkei Stock

energy prices: The securities pay off if the stock index rises above a preset level on designated days, according to The Japan Times. The Nikkei 225 stock average climbed to 17-year highs in dollar terms after U.S. President Donald Trump's election, prompting early redemption of the notes linked to the gauge and a rollover of the money into new offerings for Japanese investors. Faced with domestic bond yields below zero and a rally in global equities that only recently had some wobbles, domestic retail investors drove sales of bonds tied to the Nikkei 225 stock average to the highest in at least three years in January, according to Societe Generale SA. This marks a comeback for the so-called uridashi notes, offerings of which tumbled 24 percent back in mid-2015, when weak energy prices and worries about China triggered a risk-off mood in markets. The increase could be a result of the knock-out of a significant portion of outstanding structured products by December, given a 16 percent rise in the Nikkei spot level in the fourth quarter of 2016, Vincent Cassot, Societe Generale's head of equity derivatives research, and his colleagues wrote in a March 23 note. Worst-of securities, which base their payout on the lowest returning of typically two or three stock indexes, are becoming popular as issuers look to construct securities with higher yields. A pick-up in the proportion of worst-of baskets in issuance, to 35 percent in the past year from 17 percent in the first half of 2014, also fueled the increase in sales of uridashi notes, the analysts said. (news.financializer.com). As reported in the news.