Over 28% of the structured retail deposits issued last month track the exchange rate gold (XAU) to US dollar (USD) pair.
SRP database registered 1,107 structured retail deposits issued in China in November, up from 812 issuances seen in the previous month.
Underlyings, payoffs
FX rates continued to be the most featured asset class structured deposits bought by Chinese retail investors, led by products tracking the gold (XAU) to US dollar (USD) exchange rate which saw 317 issuances last month, similar to the prior month’s trend.
Source: SRP
The latest issuances stemmed from two domestic banks: China Merchants Bank manufactured 293 of which and Bank of Shanghai issued the remaining. Another issuer active in October, China Citic Bank, did not manufacture new tranches in November. Most of these XAU/USD-linked products have a short term of one to three-month tenors with a digital range payoff feature.
Similar to October, the EUR/USD currency pair remained as the runner-up with 309 products tracking this FX rates pair. Bank of China was the largest issuer among a total of nine peers, launching 99 tranches on this underlying last month. Among, 人民币结构性存款2024年第144_41期/Structured Deposit CNY GRSD2WG144_41, a tranche struck on 1 November with a digital payoff, was its best-seller in the category that collected a sales volume of CNY3.5 billion (US$480m). The product matured on 16 November, achieving a capital return of 100.11%, or 2.69% p.a.
November also saw the theme of gold used for product underlying on the rise despite the price drop in the month. There were 94 new issuances of structured deposits tracking direct gold last month, up from 70 products in the prior month.
Other popular FX rates underlyings include the Australian dollar to the US dollar (AUD/USD) (77 products), the US dollar to the Japanese Yen (USD/JPY) (32), and the US dollar to China offshore spot (USD/CNH) (32).
Among index underlyings, the CSI Smallcap 500 made the top three ranking of the most-used underlyings during the month, with products tracking the index registering 112 new tranches, all in a single index structure. Nearly two third of these products featured a full-principal-protected autocallable payoff style.
The Nasdaq-100 Volatility Control 10% NC Index was seen in the underlying scene for first-time in the Chinese market and was introduced by HSBC via two structured deposits tracking the risk control index. One denominated in Chinese yuan and the other one in US dollar, both products have a two-year-tenor with a puttable capital protection with knock out payoff style.
The CSI 1000 and the CSI 300 index were among the popular major indices seen constructing in the structured deposits in China. Each saw the respective issuance of 14 and nine tranches last month, respectively.
Issuers
Among 13 issuers in the league table, China Merchants Bank continued to top the list as the largest issuer of structured deposits by number of issuances in China, with 440 tranches launching in the market in November.
Source: SRP
The bank also issued 2,001 structured deposits sold to institutional investors last month. Of these 1,999 were tied to FX rates – mostly linked to the XAU/USD pair, while the remaining two products were gold-linked structures.
Bank of China came in second following its product issuance of 243 tranches last month, while Ping An Bank advanced four spots to hover at the third place now with 84 product issuances.
Shanghai Pudong Development Bank and China Citic Bank were placed in fourth and fifth, with 67 and 54 product issuances, respectively.
Besides structured deposits, DBS Bank brought to makret six wealth management schemes last month, consisting of two USD/HKD pair-linked products, two CSI 300-linked products, one USD/JPY-linked product, and one shares of Advanced Micro Devices-linked product. All of which featured a digital payoff style.
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