Following the launch of Ethereum futures by the CME group earlier this week, Marex Financial Products has launched another first in the structured products market.
The UK-based non-bank issuer has rolled out a new autocallable note linked to Ethereum targeted at professional investors seeking to gain exposure to the second cryptocurrency by market capitalisation by extracting yield from its volatility while getting downside protection.
“After overwhelming demand on Bitcoin Autocallable note, Ethereum was a logical next step,” Joost Burgerhout (pictured), head of Marex Financial Products, told SRP. “The reason we went with Ethereum was that the CME just launched Ether futures, we have done the preparation in anticipation of the launch on CME and were ready to issue structured note with barriers within 24 hours after the listing.”
The product which has a three-month investment term and a 70% downside protection barrier, will pay a 50% coupon if the cryptocurrency is above its initial level set at 100% on the last observation date
Ethereum has received increasing attention from investors on the back of the recent Bitcoin rally and has been at the end of recent inflows. However, Marex is looking further and is “actively looking for other cryptos as well and how we can potentially combine these," according to Burgerhout.
Solactive, Morgan Stanley create ‘future of plastic’ index
Solactive, ISS ESG, and Morgan Stanley have launched the Solactive ISS ESG Future of Plastic Index – a publicly listed index consisting of global companies with high performance in innovation and implementation of plastic waste solutions and efficient material use.
The index is aimed at equiping investors with a benchmark index of companies addressing the plastic waste issue with new practices and solutions.
Morgan Stanley developed the underlying methodology for the index using data from ISS ESG. Starting with the Solactive GBS Developed Markets Large & Mid Cap Index universe, the Solactive ISS ESG Future of Plastic Index avoids companies with low liquidity, major environmental, social, or governance (ESG) risks, and companies with ties to products contributing to marine ecosystem degradation, such as microbeads or significant single-use plastic packaging.
The remaining companies are then ranked using a proprietary plastic waste solutions score, reflecting corporate involvement in recycling solutions and practices, use of recycled content, efficient use of raw materials, extension of useful product life, and/or developing alternatives to single-use and micro-plastics. The index is constructed by investing in the equally weighted basket of the 50 “leaders” stocks ranked at the top of the proprietary scoring methodology.
Six rolls out first ESG Indices covering the Swiss bond and equity markets
The Swiss Six Exchange has launched new ESG indices in the Swiss equity and bond markets. The new indices cover the sustainability criteria of environment, social/society and governance.
The Swiss exchange is offering two SPI ESG indices for equities based on the Swiss Performance Index (SPI) and 20 new SBI ESG indices based on the Swiss Bond Index (SBI).
To be included in the indices, a company must have an ESG Impact Rating of at least a C+ and generate no more than five percent of its revenue in a critical sector. According to the index regulations, these critical sectors are adult entertainment, alcohol, armaments, gambling, genetic engineering, nuclear energy, coal, oil sands and tobacco. Companies appearing in the list of the Swiss Association for Responsible Investments will not qualify for inclusion.
The new ESG indices have been developed drawing on data sources from the Swiss sustainability rating agency Inrate - the ESG Impact Rating developed by Inrate measures the positive and negative impacts of companies on the environment and society.
Vienna Exchange takes index calculation to the next level
The Vienna Stock Exchange (VSE) has deployed new index calculation technology in a move to improve the quality of its market infrastructure.
The new Vienna Index Engine (VIE) was developed together with the German software and consulting company msgGillardon. The new engine uses Apache Kafka, a ‘high-performance open source streaming platform’ which increases capacity by a factor of 10.
Existing VSE benchmarks like ATX, CECE, RDX and any new index types will benefit from a higher processing speed and stability as well as longer calculation times (24/7).
There are around 7,000 live structured products featuring 24 indices from the Vienna Exchange with the ATX taking the lion’s share (6,500 products/US$US$153m) followed by the CECE Composite Index in EUR (258 products/US$20,6m) and the ATX Five Index (55 products/US$4.6m).
The main issuers of the exchange’s indices are BNP Paribas (2,267 products /US$3.8m), Unicredit Bank (1,853 products/US$6.4m) and Deutsche Bank (1,461 products/US$2.1m). Most of the indices from the Vienna Exchange sold via structured products are wrapped as flow and leverage certificates (short/long with stop loss) as well as reverse convertible and worst of option structures.
Vontobel issues two new bitcoin tracker certificates
Vontobel has launched two new delta one certificates tracking the performance of Bitcoin as demand from investors seeking to participate in the cryptocurrency rally continues. The new certificates are subject to a management fee of 3.75% pa.
Vontobel became the first Swiss issuer to launch a tracker certificate on Bitcoin in July 2016 – the two-year Voncert on Bitcoin (CH0327606114) tracker which had a nominal of US$665 and an issue size of 1,500 certificates, was listed on the SIX Swiss Exchange.
The Swiss bank also announced that is terminating the existing bitcoin tracker certificates in accordance with the terms set out in the sales prospectus since regulatory requirements mean that the product offering is no longer economically viable. The official redemption amount per certificate will be determined in accordance with the issuance conditions and will be paid to investors on March 19, 2021.
‘This fee allows Vontobel to offer Bitcoin certificates while meeting the high capital requirements relating to cryptocurrencies,’ stated the bank. ‘The new subscription ratio of 1:100 means that the product can also be acquired by investors who want to participate in the performance of Bitcoin and/or are planning to invest in the cryptocurrency for the first time with a limited capital outlay.’
According to a clause in the product’s term-sheet the risk of a potential cyberattack or of the theft of Bitcoins is borne by the investor.
HSBC PB launches in Thailand
HSBC Private Banking has launched in Thailand marking the UK bank’s second onshore business in South East Asia after Singapore, in a move to capture the region’s fast-growing wealth.
The private bank will ‘provide clients access to international capital markets by leveraging its existing infrastructure of advisory, investment methodologies, controls and systems in Asia’. The team will cover client management and advisory services while clients’ assets will be booked in HSBC Private Banking in Singapore, a ‘preferred wealth management hub for Southeast Asian HNW individuals’.
Since 2016, the Bank of Thailand has been introducing a series of additional measures to relax foreign exchange regulation and encourage greater flexibility in the financial markets under the Capital Account Liberalisation Master Plan, opening up opportunities for selective offshore investments.
Thailand’s retail market is dominated by three domestic financial firms which represented a combined 64.7% market share in 2020 – CIMB Thai Bank (139 products/US$235m), Phatra Securities (1,518 products/US$146m) and Siam Commercial Bank (693 products/US$141m).