Coupon strategies on Siemens

Coupon strategies on Siemens

The Siemens share (DE0007236101) came under pressure after the numbers last Thursday: It was not so much the retrospective that disappointed than the somewhat cautious outlook. After a 12-month high at just over 118 euros, the share is currently trading at 111 euros. If you think of a defensive entry at this level, you will choose the right certificate based on your investment horizon.

Discount certificate with 10 percent protection (March)

If the share is trading at roughly the current level in four months, the discount certificate from J.P. Morgan with ISIN DE000JJ0CD42 for a purchase price of 100.50 euros, an impressive 4.50 euros or 12.5 percent p.a. one. If, on the other hand, the share closes below the cap of EUR 105 on the valuation day 19.3.21, investors receive a payment equal to the closing price (cash settlement).

Reverse convertible bond with 12.4 percent p.a. Yield (June)

The reverse convertible bond of BNP Paribas with ISIN DE000PF1XAC1 pays an interest coupon of 14 percent p.a. on maturity (6/24/21) regardless of the share price development. (Return on purchase above par 12.4 percent p.a.). If Siemens closes below the base price of EUR 110 on June 18, 21, investors will receive 9 shares according to the subscription ratio (= EUR 1,000 / EUR 110, fractions in cash).

Express Classic with quarterly observation, max. 4 year term

The HVB Express Certificate (ISIN DE000HVB4WB7) will be defined on December 11th, 2020: The redemption level will be set at 100 percent, the barrier that is only active on the final valuation day at 65 percent of the closing price. If the share trades on the first of the quarterly observation days (8.2.21) at or above the redemption level, the early repayment will be made at 1,031 euros. Otherwise it will be observed again on 8/8/21; the repayment amount now increases by 31 euros to 1,062 euros, etc. If there is no early due date, only the barrier for the repayment of a total of 1,465 euros is decisive on the final valuation day (9.12.24), otherwise the delivery of shares takes place according to the subscription ratio (= 1,000 / course on the start day). Subscription until December 10, 2020 at EUR 1,007.50.

Report conclusion: Discount certificates, reverse convertibles and express certificates are aimed at yield and distribution-oriented investors who want to position themselves for a sideways movement of the share and receive bonuses.

This article does not constitute a recommendation to buy or sell Siemens shares or investment products based on Siemens shares. No liability is assumed for the correctness of the data.

Author: Thorsten Welgen


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