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Singapore’s United Overseas Bank (UOB) has recorded a significant growth in its structured products business with traded notional soaring almost twice in the mass affluent segment in 2024 compared to the prior year, buoyed by the robust performance of US equity.

The surging volumes stemmed from products sold across the board, roughly equally divided between equity flows and principal-protected structured notes, according to John Lau, head of treasury, Singapore and region at UOB.

Meanwhile, DBS Bank, the largest bank in Southeast Asia by assets headquartered in Singapore, saw its net profit increase 10% year-on-year to SG$2.62 billion (US$1.9 billion) in Q4 2024.

In the city-state, Hong Kong stocks remained the most favoured reference assets for both structured warrants and daily leverage certificates (DLC) listed on Singapore Exchange. Tesla shined for the DLCs in Q4 2024.

Structured warrants wrapped up the quarter with trading turnover reaching SG$1.1 billion (US$815m), up nearly 42% year-on-year (YoY) and 38% from the previous quarter.

In South Korea, the sales of equity-linked securities (ELS) dropped 34% to KRW4.55 trillion (US$3.1 billion) in January YoY. Index basket tumbled significantly, but stocks such as Tesla and Nvidia continued to drive activities, our South Korea Market Review for January 2025 shows.

On a broader level, the sales of structured products in Asia Pacific ex-China recorded a 14% jump to an estimated amount of US$257 billion in 2024 YoY. The volume came from 117,893 product issued across Hong Kong SAR, Taiwan, South Korea, Japan, and Thailand last year, up from some 95,594 products seen in 2023, according to our latest Spotlight on Asia Pacific.

In Europe, Mint Tower Capital Management, founded by a suite of former ABN Amro bankers in equity derivatives, has launched the Mint Tower Defined Returns Fund. By investing in structured products, the Dutch open-ended fund aims to achieve a return comparable to the stock market over the medium-to-long term, but with lower risk.

At the same time, Amundi has posted inflows of €3.6 billion from structured products for 2024, €0.9 billion of which was recorded in the fourth quarter.

Spanish Stock Exchange (BME), a subsidiary of SIX Swiss Exchange, has licensed two new indices to Bank of America (BofA) for structured products - the Ibex 35 Rolling Futures Decrement Index and SIX Sweden 30 Rolling Futures Decrement Index.

In January, structured products traded on SIX Swiss Exchange has reached CHF855m (US$939m) in turnover, up 17% from the previous month or an increase of 41% from the prior-year period.

On the regulatory side, the European Parliament and the Council have finalised the review of the Benchmarks Regulation (BMR) after reaching a political agreement in December.

The revamped rules are designed to strike a balance between reducing the burden on European Union (EU) administrators and users of benchmarks, while still ensuring the ‘robustness and reliability’ of benchmarks used and produced in the EU.

Moreover, the UK Structured Products Association (UKSPA) is preparing response to the recent Consumer Composite Investment (CCIs) consultation launched by the Financial Conduct Authority (FCA) at the end of last year.

Across the Atlantic, Minnesota Life has filed a registration statement for its first registered index-linked annuity (Rila) that offers exposure to Janus Henderson Equity Directionality Index (JEDI), Nasdaq 100, MSCI EAFE Index and S&P 500. The Rila, AccumuLink Advance, features an accumulation strategy.

In the meantime, Janus Henderson has opened a new office in Abu Dhabi Global Market (ADGM) to capitalise on ‘strong GDP growth and investor confidence’ in the region. The British-American firm with over US$300 billion assets under management has several indices live in the US annuity market, including its flagship Janus SG index series co-developed with Société Générale.   

American law firm KlaymanToskes is continuing its investigation into Stifel, Nicolaus, & Co over investor losses in structured products recommended by its advisors. Investors who have suffered losses of US$100,000 or more because of structured note recommendations by their broker or investment advisor are urged to contact the law firm.

Image: Have a nice day/Adobe Stock.

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