Expected
yield per annum
21-24%
  • Minimal Investment amount 5800 USD
  • Expiration date: 23.01.2019
  • Capital Protection: 70%

Alibaba Group is a Chinese Internet giant, specializing in e-commerce. At the beginning of 2018, the level of market capitalization was $ 454.45 billion, and not so long ago it exceeded $ 500 billion, making Alibaba Group the 6th largest company in the world, the number of employees is more than 50 thousand people.*

Underlying Assets ALIBABA
Currency USD
Expected yield, % per annum 21-24%
Volume of investments 5800 USD
Term of placement of the deposit up to 23.01.2019
Protection of capital 70%
Participation Rate 1.4
Direction of Underlying Asset Price Movement on a price increase

Growth factors:

 

  • The e-commerce market has been growing at an average annual rate of 20-25% since 2010, Alibaba is demonstrating one of the best dynamics of online sales growth, periodically exceeding the average market indicators.
  • Being regionally in the same place as most of the production capacities of high-tech companies, it can offer more favorable prices than competitors, due to lower logistics costs.
  • In addition to consumer online trading, it is also engaged in B2B cooperation, which distinguishes Alibaba Group from direct competitors and allows it to increase sales volumes at the expense of the uncovered market segment.
  • The largest IPO in history (for the year 2014) led to a 20-fold increase in the company's capitalization over the following 4 years. No other company in the world can boast such a dynamic.

 

Analysis:

From a technical point of view, the 5th impulse wave will start to form in the direction of growth within the next month, with the aim of $ 245-250 per share, which, in turn, may be facilitated by the continuation of expansion from within. The structure of Alibaba Group includes a number of different Internet services, as well as a film company. In addition, rumors about the intentions to invest in the production of electronics and cars have been around for a long time, and by the end of 2017 Alibaba has become one of the most profitable companies in the world, which may well contribute to the implementation of the company's old investment plans. The expected profit at the time of expiration is 33.2-38.9%.

 

 

This product allows you to participate in the growth of the underlying asset wherein the investor risks with a limited amount, which is determinated by the Capital protection level.

The product is dedicated specifically for conservative investors, where they can  define and limit the risks of such products themselves. As such, these products provide a great opportunity to receive relativelly high income whilst minimising the possibility of capital loss.

*according to the information from the company's website.

  • Product with capital protection
  • Minimal Investment amount 5800 USD

How the product works

Once the contract is concluded, the initial price of the underlying asset, the Capital protection level, and the participation rate are recorded.

Investor risks are limited to the amount determinated by the Capital protection level.
A product with 100% protection level carries the lowest possible risk and the lowest potential yield.

The repayment to the client is calculated according to the following formula:
Repayment = Investment amount * Capital protection level + Participation rate * Price change- Commission.
Where the investment amount is taken as 100%, and the price change is calculated as follows (Current Price – Initial Price) / Initial Price * 100%.

The commission for a investment product creation is 2% of the initial investment and is charged at the time of product expiration.

If at the Expiration date the price of the underlying asset is higher than the initial price, the investor is paid 100% of the invested funds and an income equal to the product of the participation rate and the growth of the underlying asset. Conversely, the investor is paid the invested funds in accordance with the Capital protection level.

The parameters of the products are indicative and may vary depending on the market situation.

 

Examples:

1. The price of the underlying security moves in the direction chosen by the investor.

In this case, the investor receives the invested amount calculated by the formula: 100% (initial investment) * 70% (Capital protection level) + 1.4 (participation rate) * 60% (price change) = 154%

2. The underlying security’s price moves in the opposite direction and finished below the Capital protection level.

In this case, the investor receives the invested amount calculated by the formula: 100% (initial investment) * 70% (Capital protection level) = 70%

Attention!

The product yields shown in the examples and past financial performance do not guarantee future profits. All investment products are denominated in USD. The commission for an investment product creation is 2% of the initial investment and is charged at the time of product expiration. The expected yield of investment products is given in annualized percentage form.

Note:

The protective investment component is allocated to fixed income products (Eurobonds and deposit schemes at leading banks). NordFX cannot be held responsible for any potential risks associated with the default of Eurobond issuers or the bankruptcy or default of any of the banks in which the deposits are held.

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