It was a bustling week for Asian markets.
The Japan Securities Dealers Association (JSDA) started the week by releasing statistics showing that the country’s structured Uridashi notes, locally known as complex structured bonds with an autocallable payoff, recorded a continuous decline in sales for the second half of 2024 amid a tightened regulatory environment.
Private placements dropped by 19% to JPY1.05 trillion year-on-year while public offerings fell by 57% to JPY5.9 billion.
More recently, similar structures in South Korea, namely equity-linked securities (ELS), posted a 52% and 55% increase in sales for principal-at-risk and fully-principal-protected products in February YoY, respectively.
Meanwhile, derivative-linked securities (DLS) sales tumbled as interest rates-linked products lost traction, according to our South Korea Market Review, February 2025.
In Malaysia, Kenanga Investment Bank has logged almost a tenfold increase in turnover of Hang Seng Index (HSI)-linked listed structured warrants in 2024 as Malaysian retail investors sought to capitalise on the recovery of Hong Kong equities.
That has pushed the bank’s market share of listed structured products to 52% driven by a strong rebound of the index, group head of equity derivatives Philip Lim told SRP in an interview.
For people moves, Bank of America has promoted Navneet Bansal to managing director, head of derivatives distribution for Asia Pacific. The role assumes part of the responsibility held by Arnaud Davoust who left for Natixis mid-last year.
In the US, Minnesota Life has added a basket index for its index-linked universal life (IUL) shelf through a ‘hindsight’ indexed account, comprising the S&P 500, Nasdaq 100 and Russel 2000, with a 60/40/0 split weighted on performance.
The Eclipse Accumulator II IUL will continue to offer indexed accounts of S&P 500, S&P 500 Low Volatility and S&P PRISM indices.
Morgan Stanley’s net income rebounded to US$3.7 billion from US$1.5 billion for Q4 2024 YoY as its revenues climbed a quarter to US$16.2 billion. In the US registered structured note space, the banking giant closed the year with US$14.2 billion gross sales, a surge from US$9.8 billion for 2023, making up 9.5% of the market.
As stocks of Walgreens, CrowdStrike and MicroStrategy hit the news headline last week, we looked at how structured products linked to these US stocks have fared, especially the sales activities year-to-date, in the latest Spotlight.
Shifting to Africa, First National Bank (FNB), a division of FirstRand, has added another Bloomberg decrement index for its first worst-of autocall offering with a goal of capitalising on anticipated reconstruction out of the on-going military conflicts in Ukraine and Gaza, said Samukelo Zwane, head of product, wealth and investments at FNB.
The 100% principal-protected autocallable note is slated to be be issued and hedged by UBS AG.
In Europe, structured products sold in Switzerland achieved a turnover of CHF51.1 billion (US$56.8 billion) in the fourth quarter of 2024, up 24% from the prior-year period, according to the Swiss Structured Products Association (SSPA).
For the full year 2024, turnover amounted to CHF196 billion, an increase of nine percent YoY (2023: CHF180 billion).
For Italy, we sampled sales and issuances of the five main structured product issuers in 2024 and reviewed their earnings for the year.
We also took a close look at one of the key regulatory requirements to be observed by the structured products industry once the European Retail Investment Strategy (RIS) comes into force.
Building on existing regulations (such as AIFMD, Mifid 2 and Priips), RIS seeks to improve investor protection.
Société Générale last week launched Opportunité Amplegest Pricing Power Transatlantic Mars 2025 in France. The 10-year medium-term note (MTN) is linked to the performance of the Amplegest Pricing Power Transatlantic Fund, which aims to outperform its benchmark, the Solactive GBS CW DM US & Eurozone EUR Index NTR.
Image: Tawatchai1990/Adobe Stock
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