Religare Silver Structured Product

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Do you know that your investment in Silver would have delivered an astounding 73% return in the calendar year 2010?Although Silver has been one of the best performing assets over the last few years, not many investors have benefitted from the unprecedented surge in the metal’s price. This is primarily due to the lack of suitable avenues to invest in Silver. While buying the physical metal entails problems of storage & pricing risks, Silver ETFs are not yet available in the Indian markets. Moreover, few investors can stomach the extreme volatility in commodity prices. In this regard, there is a need for a product that captures the upside in Silver prices, while fully protecting your initial capital investment. Religare Silver Structured Product (Series XIX) does just the same. It provides you an opportunity to gain from the positive performance in Silver, while protecting your principal.

Silver as an investment option:

• In the last calendar year, Silver has given an annual return of 72.84% fuelled by sharp upsurge in fabrication demand

• Currently, Silver is trading at $30.16/ounce which is at a good discount to its previous all time high of around $50/ounce which it had touched in 1980s

• In the last two years, the gold-silver price ratio has fallen from an average of 62 to around 50 as silver continues to bounce from its underperforming status

• In the recent past, the industrial & consumption demand for silver has greatly outpaced mine production thereby forcing market participants to draw down existing stocks to meet demand. As these available sources continue to decline silver’s fundamentals continue to strengthen.

• Silver has all the monetary properties of Gold and more – lower supply and increasing industrial demand

• Effective hedge against inflation, a store of value and an efficient portfolio diversification avenue

Product Overview:

Investors are offered an opportunity to participate on the upside of Silver prices, while limiting them from a potential downside. The portfolio will consist of Non Convertible Debentures (NCDs) with a tenor of about 40 months. The returns will be calculated as the participation of positive differential between MCX Silver futures price levels on the Final Fixing Date and the Initial Fixing Date. If the differential is negative i.e., the initial level is higher than the final level, then the investor will get back the principal invested.

Product Highlights:

Particulars	Details
Launch date	10-Feb-11
Closing date	25-Feb-11
Trading date	04-Mar-11
Tenor	36/40 months
Issuer	Edelweiss Finance Limited
Underlying Benchmark	MCX Silver future performance
Participation Factor	85% of the silver performance
Initial value	Average of Official Closing of three months  future of Silver on the MCX as on Initial  Fixing Dates
Final Fixing values	Average of official closing of near quarter future of Silver on the MCX as on Final fixing dates (Average of Silver on the last Thursday of last four quarters)
Minimum Investment	Rs.10 lakh and in multiples of Rs.10 lakh