The Belgian Structured Investment Products Association (Belsipa) has reported sales of structured products sold on the primary market reached €1.26bn during the second quarter of 2017, an increase of 5% compared to the same period last year. The turnover in the secondary market accounted for €1.3bn, which represents an increase of 39% compared to the second quarter of 2016, according to Belsipa. The sector association also confirmed that Peter Audoore, head of asset structuring, Belfius, has joined Belsipa as a board member, replacing Jean-François Masure, head of structuring treasury and financial markets, also at Belfius.
Exposure to equities continued to fall with primary market turnover volume, at €720m, shrinking by 28% year-on-year and 4% since January. Measured in both sales volume and total assets invested, equity-linked structures however still make for the largest share of the structured products market, the trade body reported.
The lower proportion of equity-linked products this year underlines investors' appetite for diversification, especially when the context is uncertain, according to Gilles Staquet (pictured), president, Belsipa. "Belgian investors have been looking at fixed-income structures, like floaters, which offer a good protection against rising interest rates," said Staquet.
"I think there are a lot of uncertainties at the moment, especially concerning interest rates. They have been increasing sharply recently, but nobody knows if that movement will continue. The recent drop of the USD also creates some uncertainties. In this context, structures that offer a coupon that will increase when rates go up are particularly attractive," said Staquet.
While structured notes, with sales of €778m during the second quarter made for the biggest share in the primary market (62%), structured funds, with a volume of €687m, took this role on the secondary market (52%). The outstanding volume invested in structured products by Belgian retail investors stood at €33.2bn at the end of June, largely stable compared to both the previous quarter and last year, according to the association.
The number of new structured products issued in Belgium between April and June 2017 remained stable compared to the previous quarter (294 products issued in Q2 2017 against 304 new products in Q1 2017). Sixty-seven percent of all new products were issued in the leveraged products segment, while structured notes accounted for 26%. Measured by underlying type, equity-linked instruments represented a share of 77% of all newly issued products.
Belsipa's data matches SRP's with 77 structured products -including non-retail, but excluding leverage and flow - added to the SRP Belgium database between April 1 and June 30, 2017. The products, which collected estimated sales of €870m, were sold via 13 different distributors of which Belfius and KBC, with 14 products each, were the most prolific. BNP Paribas Fortis (13 products) was the third most active distributor followed by Deutsche Bank (12), BPost Bank (seven) and Crelan (six). The other providers that distributed structured products to Belgian retail investors in the second quarter of 2017 were AG Insurance, Nagelmackers, ING Belgium and SG Private Banking with two products each while single issues were seen from Axa, Puilaetco Dewaaij and VDK Bank, according to SRP data.
Belsipa was founded in 2013 and has Belfius, BNP Paribas Fortis, ING Belgium, KBC, Societe Generale (France), Commerzbank and Natixis as full members. Next to them, also AG Insurance, Axa, Crelan, Deutsche Bank and Nagelmackers also provided data and the report covers approximately 95% of the Belgian market. Apart from Staquet and Audoore, the Belsipa board also comprises of Christiaan Sterckx (vice chairman) while Thomas Wulf acts as the secretary general.
Click the link to view the full Belsipa market report on retail structured products for 2Q 2017.
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