Structures linked to companies from the banking-, auto-manufacturers- and luxury goods sectors were in demand during Q4.
Products linked to single names collected an estimated €380m – representing approximately six percent of the notional traded in the fourth quarter of 2022 in France.
Market share remained sequentially flat from the previous quarter and was down 42% year-on-year. The gap has been filled in by single-name indexes with assumed dividend, which continued to gain visibility throughout 2022.
Stock-picking based on fundamental research and the lookout for opportunities from stocks, which have not fully recovered post-pandemic, has been a preferred approach for many investors to address the geopolitical uncertainty in Europe and on a macro level.
Shares from the banking sector, including those of Société Générale, Crédit Agricole and BNP Paribas, were the preferred underlyings of the French investor in the quarter, with estimated sales of €90m – equal to 24% of the total single-stock universe. One of the best-selling products was a note on the share of Crédit Agricole, which was issued on the paper of Morgan Stanley International and collected €8.4m during the subscription period.
The auto-manufacturers sector captured 18% of the single-stock market, boosted by Stellantis, which was the most popular share in Q4 2022 after losing more than 25% of its value in 2022.
Structures tied to the share of Stellantis gathered approximately €38m – 10% of the single stock-linked universe in the quarter. Two-thirds of the volumes came from products that struck in December, with Morgan Stanley, Citi, Credit Suisse and Société Générale among the issuers. Additionally, five products, issued by Citi, were linked to iStoxx Single Stock on Stellantis GR Decrement 1 – an index with assumed dividend.
The share of Mercedes-Benz was also trending with five products linked the stock and two products linked to an index: iStoxx Single Stock on Mercedes-Benz Group GR Decrement 3.8 Price EUR and Solactive Mercedes-Benz AR 5 Index, both with assumed dividend.
Sales of products linked to companies from the luxury goods sector (nine percent market share) have been boosted by the possible rebound of Chinese consumer demand in 2023, which is expected to favour the luxury industry. The stock of Louis Vuitton Moët Hennessy (LVMH) was top luxury pick, while Veolia Environnement, a French company active in water management, waste management and energy services, translated a positive bet on the recession-resilient utilities sector (eight percent market share).
Other popular shares in the quarter included Orange (communication services), Total Energies (energy) and Klépierre (real estate).