US banks see growing structured product issuance figures, while China reaps the benefits of structured deposits linked to the country’s first multi-asset QIS index.
Goldman Sachs’ structured product sales rose by 51.5% in the third quarter of 2021 with sales volumes of US$3.2 billion (881 products), compared to US$2.1 billion (726) products in the same period a year prior. This figure represents a 7.5% decrease in sales from the second quarter of 2021.
The bank’s issuance has steadily increased from Q3 20 to the first quarter of 2021 where issuance hit a peak of 928 products worth US$3.5 billion. This number swiftly tumbled during the next two quarters. It currently ranks as the second most prolific issuer group in the US market for the third quarter of 2021, according to SRP data. It follows Citi which has a total of 1,033 structured products valued at US$3.4 billion - other top-ranking issuers include J.P. Morgan, Barclays, Morgan Stanley, and UBS.
Fellow US institution Bank of America issued a total of 173 structured products worth US$1.4 billion in the third quarter of 2021, according to SRP data, a 97.3% increase from the same quarter a year prior, as well as a 122% increase from the previous quarter.
As an issuer group, Bank of America’s issuance has steadily gained traction over the past year before stagnating with 106 products issued in Q3 20. SRP data shows that Bank of America has entered the top 10 rankings as an issuer group during Q3 21, in seventh position ahead of other leading manufacturers in the US market such as Credit Suisse, Royal Bank of Canada and HSBC.
Morgan Stanley remains a top five issuer in the US market with more than US$9.5 billion sold to date this year across over 2,000 products. In Asia Pacific, the US bank is also among the top foreign issuers of structured products with almost 900 structures sold in 2021 worth US$3.2 billion. In Europe the bank has lost some ground over the last few years but remains an active player with more than 40,000 products marketed this year, mainly leverage & flow, worth US$800m.
In a first for the Hong Kong SAR market, Hang Seng Bank has introduced equity-linked investments (ELI) linked to US stocks for retail investors with a minimum ticket of HK$100,000 (US$12,861). The new customisation tool, which went live on 18 October, allows ELI investors to select their preferred US stock underlyings, as well as the investment period from one to 11 months, strike price and airbag level. The subscription is available in seven currencies.
China Minsheng Bank has collected nearly CNY400m (US$62m) from structured deposits linked to the country’s first multi-asset quantitative investment strategy (QIS) index which features ESG filters. The new custom index, the Minsheng ESG Overseas Allocation Index (民生银行海外ESG资产轮动指数), known as MSMEGA, is administered and hedged by Société Générale. Following the first strike on 10 September, China Minsheng Bank has issued 12 tranches of the structured deposits with a bull call spread, five of which generated a US$28.3m notional while the remaining are CNY-denominated.
Sales of equity-linked securities (ELS) in South Korea continue to shrink despite a stable issuance. Sales volumes of ELS fell by 20.5% to KRW10.8 trillion (US$9.3 billion) in the third quarter of 2021 quarter-on-quarter (QoQ), or a 32.7% climb year-on-year (YoY), according to the latest report from the Korea Securities Depository (KSD).
Meanwhile, 264 equity-linked bonds (ELBs) were sold at KRW7.8 trillion during the same period, down 75.4% QoQ or 54% lower YoY. The combined volume of ELS and ELB declined by 30.8% to KRW11.6 trillion in Q3 21 QoQ but represented a 17.8% rise YoY.
On the people front, Amundi has appointed Eric Bramoullé as head of marketing and products, effective 1 November. Bramoullé has been part of the company for 22 years and most recently served as CEO of Amundi South Asia, following CEO positions at Amundi Austria between 2015 to 2018 and Amundi Poland from 2013 to 2015. Albert Tse, former head of distribution sales and marketing for Amundi, succeeds Bramoullé.
Amundi has also appointed Gilles Cutaya as deputy head of Amundi marketing and products.