SRP Apac Awards: Credit Suisse recognised in five categories

For the first time and due to the cancellation of the SRP Apac Conference and Awards dinner, the awards were announced and presented via a Zoom webinar announcement.

Credit Suisse secured the first place in several categories based on analysis of annualised sales-weighted performance as well as editorial submissions. The Swiss bank capitalised on its solid footprint across the Asia pacific region where it continues to hold a leading position.

Best House, Asian Equities

In 2019, Credit Suisse deepened its footprint in the content and platform solutions space, supported by infrastructure, and continued to invest heavily in its Asian franchise.

“We stepped up on our capability and flexibility in offering actively managed certificates [AMCs] and thematic delta one notes,” says Charles Firth (pictured) managing director, Asia Pacific solutions. “This easy-to-manage implementation of multi-asset strategies, coupled with effective generation of reporting, has received solid traction in the region, and supports the private banks’ shift in focus towards products that generate recurring revenue.”

Connectivity is critical in increasing the speed and enhancing the efficiency of the workflow

Credit Suisse is also a pioneer in its structured credit business in the region and is committed to educating and handholding clients on the use of special purpose vehicles (SPVs) - bond repackaged notes issued by SPVs via the SPIRIT platform has grown in receptiveness over the last year, according to Firth.

“Not only we helped clients in onboarding SPVs, we also found creative ways to enhance yield by introducing the overlay of various features to these repackaged notes, such as FX, CDs, equity and rates,” says Firth, adding that the bank continues to build out its platform to enable its private banking clients in the region to achieve its automation plans. “Connectivity is critical in increasing the speed and enhancing the efficiency of the workflow, whilst reducing the minimum launch size to make structured products more accessible to investors.”

Best House, Taiwan

Under the current offshore structured products rules in Taiwan, which require use of an onshore master agent and a regulator-appointed committee to approve every mass retail product, Credit Suisse was the first house to issue a structured note distributed by an insurance company. It was also the first to issue a note distributed by a bank – in other words, the Swiss bank set the standard applied ever since for all market participants.

“Our dominance is well evidenced by number of Taiwanese distributors we have as clients – by the end of end 2019 we increased the number to 32, making us number one among investment banks in the market, and more than any other competitor,” says Firth.

In 2019, Credit Suisse continued to set the product agenda in the country, selling the first partially principal-protected bonus enhanced note (BEN), and expanding its oil (WTI)-linked twin-win product marketed with Citi in 2018 with a slight modification on the structure - increasing capital protection to 100% - “to enable investors to have greater certainty regarding their maturity payoff”.

Bearing a resemblance of a shark fin structure, the twin-win would enable investors to profit from moderate underlying volatility while retaining principal protection. The structure was distributed by Taishin Bank and was later adopted by several distributors and with various underlyings. 

The bank also launched hybrid structures in Taiwan targeted at more sophisticated investors to express views on both direction of EUR vs USD, 10yr USD CMS (constant maturity swap, ie the 10yr swap rate) and S&P 500 in range accrual structures, some with an added target redemption feature. These also include a variety of zero callable/bullet notes in different currencies (USD/AUD/CNH/ZAR) which were sold via Taiwanese distributors, enabling Taiwanese retail investors to access this institutional staple product, according to Firth.

Best House, Korea

The bank’s Korea retail product franchise remains a consistent participant in this market and is behind many of the innovations that have become commoditised industry standard products in the flow market.

“Aside from the ‘flow’, we continued to meet demand for innovations and customised products,” says Firth. “Innovation can be on payoffs, but more recently innovations have focused on underlyings of structures. We met client demand for enhanced exposure to supply chain financing, an exciting new asset class which provides an extremely attractive risk-reward proposition on a relative basis.”

The bank offered this structure via a fund provided Credit Suisse Asset Management and also introduced this as a leveraged product linked to its CSAM fund to retail clients in Korea.

The product’s performance is linked to Credit Suisse Nova Lux Supply Chain Finance High Income Fund (USD Class). “The unique part of the structure is that we provide 3x leverage to our clients in quanto KRW,” says Firth. “This product has been successfully sold in Korea with total after leverage notional of USD300 million, making it one of the most successful innovations in Korea last year.”

Most Innovative Index

Credit Suisse’s 5G Frontier Index (Ticker: CSJA5GFA) was also recognised as the most innovative index for its ability to turn a thematic idea into an investible product.

The bank took a basket of stocks listed in its thematic research report, after rule-based filtering, to construct an index which is then wrapped into a certificate for end investors to access with regular rebalancing, avoiding any human discretionary decisions.

This index, and hence the certificate is one of the very few – probably the only – certificates that clients can buy to participate in Asia hardware/semis space. There are hardly any Asia tech ETFs or Asia tech mutual funds. The few that are there, are largely loaded with large cap internet names.

The 5G index has an unique angle that it actually looks at the real drivers in the 5G growth stories within the Asian supply chain including (but not limited to) the broad segments of mobile devices, semiconductors and network equipment, according to Firth.

“Our research insight looks at both current sales percentage and future prospects of sectors and individual companies – analyst rating on companies is part of the index filtering guideline,” he says, adding there are over USD 60mn in assets linked to the index. “The in-depth research-backed selection of the 5G Frontier basket has enabled the strategy to be more resilient over benchmark since its launch (on 17 Jan 2020).”

Deal of the Year

The Swiss bank was also recognised for delivering a market neutral Dispersion Trade offered in warrant format that pays the average of absolute difference between the underlyings and its mean – strike. Credit Suisse was the market leader in this product which sold more than USD200 million.

“The structure does well if the correlation among the underlyings decreases, and the performance of each underlying diverges,” says Firth. “The product offers an elegant solution to the client who is seeking market neutral ideas in the turbulent market condition and was also offered as correlation amongst individual underlyings were higher than its five-year average as investor shorts correlation.”