Results at some of the world’s largest issuers were up and down, while US sales volumes remained stable in H1.

Nomura Holdings has reported net revenues of JPY348.9 billion (US$2.4 billion) from April to June, up 16.7% from the prior-year quarter, according to its earnings report for the first quarter of the fiscal year ending on 31 March 2024.

Non-interest expenses, at JPY302.6 billion, were stable compared to the previous quarter and up five percent year-on-year (YoY). Accordingly, net income rose 3.2-fold to JPY23.3 billion quarter-on-quarter (QoQ), which was a 13.8-fold increase YoY.

Net revenue for global markets (GM), at JPY160.4 billion, increased by seven percent (QoQ), but was nine percent lower YoY. GM had a solid quarter in Japan-related businesses but saw a slowdown in FX/EM and securitised products as ‘internationally market participants remained on the sidelines due to uncertainty in macro environment,’ stated the report.

US counterpart Citigroup has reported a drop in earnings for the second quarter of the year, with net income, at US$2.9 billion, down 36% YoY. Revenues fell by one percent to US$19.4 billion. Markets revenues, at US$4.6 billion, were down 13% YoY driven by both fixed income and equities, relative to an exceptional quarter last year coupled with low volatility this quarter, as ‘clients stood on the sidelines starting in April while the US debt limit played out’, according to CEO Jane Fraser.

Fixed Income revenues were down 13%, as strength in the rates franchise was more than offset by a decline in currencies and commodities, while equities revenues were down 10%, primarily reflecting a decline in equity derivatives.

For its part, Galaxy Digital, one of the largest crypto derivatives manufacturers, posted a US$46m net loss for the second quarter of the year, a rebound from the US$544m net loss in the prior year quarter. However, compared to Q1 2023 when net income came to US$134.2m, it was a significant loss, primarily driven by lower net realised gains on digital assets and net unrealised losses on investments, partially offset by higher net realized gains on investments, according to the US firm’s Q2 2023 earnings report released 8 August.

Spectrum Markets revealed a dip in trading activities in Q2 ‘against a backdrop of low volatility in equity markets’, although trading levels for the first half of the year remain positive, according to the pan-European securitised derivatives exchange headed by CEO Nicky Maan. The number of securitised derivatives traded on Spectrum in Q2 2023 hit 340 million, a little below the 357 million recorded in Q2 2022. ‘This came amidst a wider pull-back in trading experienced across the industry, and the relatively small decline underlines Spectrum’s continued resilience,’ stated the report.

A closer look at SRP data has shown that in the US retail structured note market, H1 2023 sales volumes remained stable at US$54.4 billion despite issuance increasing to 17,106 products (from 15,779 in H1 2022). The S&P 500 was used as a single index in 3,774 products worth US$15.6 billion – the equivalent of a 28.7% market share. Its volume was up 10.6% YoY.

The 611 products linked to interest rates made up 12.4% of the market, on the back of 611 products sold at US$6.7 billion, which represented a 23.9% decline in sales volume from H1 2022.

A basket comprising Nasdaq 100, Russell 200 and S&P 500 continues to be the third most favoured pick despite a drop in sales volume to US$4.9 billion (H1 2022: US$3.3 billion).

Compared with the US, the Canadian market saw greater change and less concentration in global headline indices in terms of top underlying assets by issuance. In H1 2023, a total of 2,431 structured notes were issued, a decrease from 3,433 YoY. The Solactive Canada Bank 40 AR Index continued to top the league table. It was used as the underlying index for 815 structured notes during the semester, nearly doubling its issuance from the prior-year period. 

Staying in North America, on 8 August, US registered investment advisor NewEdge Wealth introduced NewEdge Investment Solutions platform, which is ‘designed to provide third-party financial professionals and institutions with access to many of the same strategies it utilises to help their own ultra-high-net-worth (UHNW) clients achieve their goals’. The new platform aims to provide investments ‘that are hard to get into, find or have structural advantages themselves’, stated the firm, a division of NewEdge Capital Group.

Finally, on the M&A front, Indosuez Wealth Management said it had signed an agreement to acquire a majority stake in Bank Degroof Petercam and a long-term partnership with CLdN.

The proposed acquisition is being carried out in partnership with the CLdN group, Degroof's core shareholder, which will retain a stake of around 20%, reflecting ‘the desire to preserve its roots and domestic presence in Belgium’, according to the announcement.

As a result, the wealth arm of Crédit Agricole will gain access to a new client base in Belgium and internationally. ‘It would expand its expertise in financial management advice and fund offerings, particularly ESG funds, by capitalising on the expertise of the Degroof Petercam Asset Management company and in investment banking activities’, stated the buyer.  

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