Vontobel has entered the Italian market for leveraged products with its constant leverage certificates which has been on the SeDeX market segment of the Borsa Italiana.
The bank plans to expand the initial product offering to include a comprehensive suite of leverage products in the next few weeks targeted at private and institutional investors in Italy seeking to execute their trading strategies in accordance with their individual risk profiles in rising or falling markets, according to Wolfgang Gerhardt (pictured), head financial products Germany. Bank Vontobel Europe, the German subsidiary of Vontobel Holding, will be responsible for the distribution, quoting and trading of the certificates. The issuer for the bank's range of leverage products in Italy is Frankfurt-based subsidiary, Vontobel Financial Products.
Since its creation in 1998, the SeDeX segment of Borsa Italiana has become one of the most mature markets for certificates in Europe, said Gerhardt, adding that the market for structured products in Italy has experienced strong growth in recent years with self-directed investors and investment professionals now using leveraged products for trading and hedging purposes.
According to European Structured Investment Products Association (Eusipa) figures for 2015, SeDeX was the largest stock exchange for leverage products in Europe with a volume of €28.7bn, according to Gerhardt. "Italy has a strong trading culture and is dependent on a liquid, transparent and competitive market," said Gerhardt. "Since the early 2000s the trading volumes on leverage products has been significant and is a market with a long history of trading leverage products. The market set up with a low number of products and high volumes is different from Germany where we have the opposite: many products and lower volume per product."
Vontobel will build its offering on the traditional leverage product set available in Italy including mini futures, warrants, constant-leverage certificates, etc., according to Gerhardt. "We will increase the number of leverage products available in the market and add new underlyings to meet investors' goals," said Gerhardt. "Our differentiating factor in the market is Vontobel's market making capabilities, liquidity, the variety of products and our post-sales services which have established the bank in other markets such as Switzerland, Germany and the Nordics."
According to Roger Studer, head Vontobel investment banking, the Italian market represents a perfect fit in terms of the client demand for certificates and our core capabilities, "allowing us to further leverage our platform and cost-efficient structures".
"The significant demand for certificates - especially constant leverage certificates - among private investors and institutional clients, combined with our many years of expertise in this product category, have provided an ideal basis for Vontobel's entry into the Italian market for leveraged products," said Studer, in a statement.
Vontobel is one of the leading issuers of structured products in Europe. It ranks top two in Switzerland with a market share of 26.6% and top five with a market share of 8.2% in Germany in March 2016.
In 2015, Vontobel entered the Swedish and Finnish markets, where it has already gained a market share of 20.7% (top two) and 10.1% (top four), respectively as of April 2016. The Swiss bank also joined the Austria certificate association (Zertifikate Forum Austria - ZFA) in January as it continues to expand beyond its core market.
Vontobel is committed to pursuing its growth strategy in other European markets, according to Gerhardt. "We have shown we can bring added value to investors with a very competitive and comprehensive offering," said Gerhardt. "Italy is just the next stage in our European expansion. We have plans to enter a number of European markets were we believe there are opportunities and we can make a difference with our offering."
In addition to expanding its existing platform in Italy, Vontobel has also increased its wealth management footprint in the country following the acquisition of Finter Bank from Gruppo Italmobiliare, which is owned by the Pesenti family, in September 2015.
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