It’s been a busy week for innovation, staff moves and launches for Apac market players.

In the ongoing, multi-year saga that has been the transition away from Libor, the Working Group on Sterling Risk-Free Reference Rates’ paper on the transition of structured notes away from GBP Libor suggests overnight Sonia, compounded in arrears, as a potentially suitable alternative rate. The Working Group believes that a Sonia rate compounded in arrears ‘will and should become the norm in most sterling derivatives,  bonds, and bilateral and syndicated loan markets given the benefits of the consistent use of benchmarks across markets and the robust nature of Sonia as a reference rate’.

For the transition of legacy products, it stressed the need for engagement between product manufacturers and distributors, ‘especially where consent solicitation may be necessary to transition a product’.

J.P. Morgan Structured Products B.V. has posted a profit after tax of US$22.3m for the financial year 2020, slightly down from the previous year (2019: US$22.6m). The Dutch domiciled issuance vehicle for structured products reported an 80% increase in fee and commission income for 2020, all received from J.P. Morgan Chase undertakings within the Emea region. The US bank is monitoring official sector guidance on potential use of ‘synthetic’ Libor for legacy products and the development of legislative safe harbours in the US. The current assumption is that the majority of these products will fall under the tough legacy classification and as such will be in scope for remediation via proposed official sector remediation methods, it said in the report.

In a move to capitalise on the accelerated transition to risk-free rates (RFRs) in Asia, Crédit Agricole closed the first USD/CNH cross-currency swap (CCS) against the secured overnight financing rate (SOFR) cleared on the HKEX with Bank of Communications in China, on 17 May. The trade, which had a notional of US$20 million, is a one-year CNH CCS fixed against USD SOFR at 2.43%. Two days later, the French bank and the Bank of China executed a SOFR vs Tokyo Overnight Average Rate (TONA) swap transaction, in a first for the Chinese market.

Staying in the Asian market, Samsung Securities has not recovered from the dip in issuance and sales in the last quarter of 2020. Net revenues of structured products continued their decline in Q1 21 reaching KRW60.8 billion (US$53m), down 40.4% from the peak in Q3 20 or up 16.9% year-on-year (YoY). Structured product income accounted for 66.7% of the total revenue of financial product sales with the remaining from funds, wrap account and trusts. The securities house retained its position in the domestic ranking as the most active structured product issuer.

Global bank BNP Paribas has promoted Stephane Ritz to head of global markets Asia Pacific, effective June. In addition, Brian McCappin has been appointed head of global markets institutional sales for the region. Ritz, a 26-year veteran of BNP Paribas, has held a variety of senior trading and management roles in Hong Kong, Japan, Paris and London. He will succeed Pascal Fischer and report to the bank’s global markets head Olivier Osty. Fischer will take up a new undisclosed role with the bank in June and relocate to Europe.

Credit Suisse has promoted Alois Müller to head of private & alternative markets Apac, a newly created role in Hong Kong SAR. In his expanded duty, Müller will report regionally to François Monnet, head of private banking North Asia and Benjamin Cavalli, head of private banking South Asia.

Turning our attention to indices, Qontigo has teamed up with Citi for the launch of the iStoxx Single Stock Decrement Indices. The index family is specifically designed to be used as underlying for autocallables, and consists of 69 indices that replicate the gross return of 23 liquid global stocks whilst assuming a constant dividend markdown (decrement).

J.P. Morgan is now the only issuer in the country offering derivative warrants tracking all three key US stock indices including the S&P 500 and the Nasdaq 100 after adding new warrants linked to the Dow Jones Industrial Average (DJIA).

The warrants, which are linked to the DJIA series ID E-mini Dow (US$5) futures listed on the Chicago Mercantile Exchange with one put and one call available, began trading on the Stock Exchange of Thailand (SET) today (28 May). J.P. Morgan Securities (Thailand) is the issuer and J.P. Morgan Securities plc acts as the market maker.

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