The spotlight is on Switzerland as over 75% of live products featuring the Roche share are more than 10% away from crossing their Knock-In barriers. Some 55% are more than 20% from breaching them.
The performance of the Roche stock throughout 2023 has raised concern in some parts of the market as the disappointing performance of the pharmaceutical company has put a number of structured products at risk in the Swiss market – mostly worst of barrier reverse convertible structures (7,149 products), often also featuring Nestle and Novartis, as well as autocalls (1,383).
Despite claims from market commentators claiming that ‘Swiss autocalls are 10% away from disaster’, SRP data shows that only two percent of worst of structures featuring the Roche share have breached their barriers in 2023 by more than 10% and 4.8% have breached their barrier by less than 10%.
Let’s continue with staff moves…
Richard Morris has joined HSBC as senior vice president, quantitative investment solutions (QIS) sales in October to “grow HSBC’s QIS franchise in the US fixed index annuity (FIA) and registered index-linked annuity (Rila) markets,” a spokesperson at the bank told SRP. Based in New York, he reports to Dave Odenath, global head of QIS sales at HSBC.
Most recently, Morris was director in QIS at Deutsche Bank in the US from June 2021. Prior to that, he spent 10 years at RBC Capital Markets building institutional equity derivatives (EQD) sales coverage with a focus on insurance companies and asset managers.
Citi is still looking to fill the vacancy of Asia head of markets after Julia Raiskin officially moved to the buy-side as Apac CEO of Millennium last week following her 15 years at the bank, a spokesperson at the bank confirmed with SRP. In her new role, which was first made public in early July, Raiskin reports to president and chief operating officer Ajay Nagpal at the US hedge fund.
Jean-Baptiste Patois has been appointed as managing director, head of equity derivatives ex-strategic derivatives, Apac at Barclays, effective 21 November, according to a spokesperson at the bank. Based in Hong Kong SAR, Patois is responsible for leading exotics and flow derivatives. He reports regionally to Hossein Zaimi, head of markets, Apac, and functionally to Ashish Prabhudesai, global head of structured derivatives and non-US flow. SRP has learned that this is a newly created role.
Krungthai Bank (KTB) has collected THB2.5 billion (US$70.9m) from a new principal-protected note tracking the Solactive Alternative Funds VT Index.
Issued in September, the three-year note was the first time that the Thai bank tapped into Solactive’s fund index, compared with its past thematic, quantitative investment strategies (QIS)-focused index – such as Solactive Global Artificial Intelligence ESG Index Linked Note issued last year and Solactive Luxury Dynamic Factors 10% Daily Risk Control TR Index issued in 2021.
While the majority of principal-protected index-linked notes issued by the bank rely on algorithm-driven QIS strategies, it has “diversified its strategy to rely more on the human elements of making investment decisions,” according to Tortrakun Satayaprasert, senior vice president, product solutions and markets innovation at Krungthai Bank.
More Hong Kong and Mainland China investors are gravitating towards tailor-made investment solutions that enable them to gain exposure to emerging investment opportunities - Jessie Pak, Wilshire Indexes
Hong Kong’s index provider Hang Seng Indexes Company (HSIL) and global benchmark platform Wilshire Indexes have entered into a collaboration agreement to develop index-related product offerings for Greater China-based institutional investors.
The partnership will capitalise on growing demand to expand the product offering with solutions to support issuers of investment products in the region – consisting not only of structured product market but also of fund managers and exchange-traded fund (ETF) issuers and other market participants, according to Jessie Pak, head of benchmarks Asia Pacific at Wilshire Indexes.
“More Hong Kong and Mainland China investors are gravitating towards tailor-made investment solutions that enable them to gain exposure to emerging investment opportunities,” Pak told SRP, adding that this growing trend leads to a greater need for index and portfolio customisation, broader access to pricing, data sets, and technology solutions.
According to Pak, there is scope to increase the use of indexes by the structured product industry in the China market but noted that the industry still needs more innovative new indexes.
“The structured product space isn’t looking for a ‘cookie cutter’ approach to product design; they want to work with the index partner in a collaborative and timely manner, delivering differentiated solutions,” she said.
Following the relaunch of the SCG Asset Management's (SCG AM) Alternative Strategies Income Fund, SRP spoke to Ian Merrill, managing director at the US provider of derivative-based investment solutions, about the strategy's goal and its place in retail investors' portfolios.
The Alternative Strategies Income Fund, which is regulated under the Investment Company Act of 1940, is “the first registered fund in the US to use solely equity-linked structured notes for income” based on the firm’s market research, according to Ian Merrill, president of SCG Asset Management.
“There are a number of separately managed account products that buy individual structured notes in the US, but this is a single actively managed interval fund with one Nasdaq ticker,” the former Barclays banker added.
An interval fund is a type of investment company that periodically offers to repurchase its shares from shareholders, generally every three, six, or 12 months. The new fund offers quarterly repurchases of shares and requires a respective minimum investment amount of US$5,000, US$2,500 and US$100,000 for class A, C, I.