SRP continued its market review coverage, focusing on the Nordics in a week which saw commodity-linked products making a comeback in some European markets.
In Finland, sales for Q1 2024 fell by 55% compared to the high mark of the prior year quarter when the highest volumes for a single quarter since the launch of the SRP Finland database in 2007 were registered.
The Finnish market was dominated by local player OP Yrityspankki (62% market share), which, driven by the increase in interest rates, reported an increase of more than 50% of clients diversifying into structured products from 2022 to 2023.
In neighbouring Sweden, sales volumes increased by 16% compared to the previous quarter but were down 7.7% year-on-year. Garantum was the number one distributor, claiming 42% of the Swedish market in Q1 2024.
The asset manager differed from its competitors in the sense that it has not launched any credit-linked notes in 2024. “Currently, we continue to view credit spreads as trading at unattractive levels,” Mats Eriksson, Garantum’s co-head investment solutions, told SRP.
The best in class in the structured product industry gathered on 9 May in Singapore as the winners of the SRP Asia Pacific 2024 Awards were revealed with Ales Sladic voted the SRP Asia Pacific Personality of the Year by his peers.
The head of Asia Pacific equity structuring and Asia Pacific equity derivatives sales, and partner at Goldman Sachs decided that he wanted to work in derivatives after an internship at the US bank in London in 1998 where he had exposure to different functions across the fixed income, currencies and commodities trading floor.
Clients and investors are happy with the returns they can get and the changes in the product mix has worked for them in terms of diversifying portfolios - Fred Despagne, Société Générale CIB
Fred Despagne, European head of EQD, QIS and investment solutions, at Société Générale CIB, told SRP that on the back of the increase in rates, which started around 18 months ago, investors continue to benefit from higher coupons and barriers.
“Clients and investors are happy with the returns they can get and the changes in the product mix has worked for them in terms of diversifying portfolios,” he told SRP.
Société Générale was recognised with six gongs at the SRP Europe 2024 Awards including the highest market accolade Best House, Europe.
In product news, South Africa’s First National Bank selected a luxury-themed index with a decrement overlay for the second tranche of its FNB 100 CapitalPreserver. The five-year, fully protected autocall, which is issued on the paper of UBS, is linked to the Bloomberg Luxury Series 1 Decrement 5% Index EUR and listed on the Johannesburg Stock Exchange.
Another capital protected structure was seen in Belgium, where Deutsche Bank collaborated with Goldman Sachs for the launch of Gold Opportunity Note 2027. The three-year product offers a one-off coupon equal to 100% of the performance of the London Bullion Market Association (LBMA) gold price, capped at 24%.
Commodities were in vogue this week as IDAD teamed up with BNP Paribas in the UK for issue one of its Oil Memory Income Plan, a three-year product that offers a coupon of 4.58% for each semester the price of WTI Crude Oil is above the income trigger of 75%. The product is the first commodity-linked structured note sold to UK retail investors since 2015.
According to IDAD’s Bevan Goulden, the heyday of commodity structured products was around 2005-2007 when “issuers and investors traded large volumes across a number of underlying commodities”.
In the US, Morgan Stanley sold the largest ticket ever for its SEC-registered structured notes in Q1 2024. The best-seller, Cash-Settled Equity-Linked Notes - Regeneron Pharmaceuticals (61771WZP6) collected US$275m.
In other news, the Securities and Futures Commission of Hong Kong (SFC) and the Stock Exchange of Hong Kong (HKEX) are considering new guidelines to enhance listing requirements and arrangements for structured products, with the aim of boosting market efficiency. The new measures include lowering the listing costs of derivative warrants and callable bull/bear contracts.
Euronext appointed former Credit Suisse sales trader Nathalie Ruiz as head of continental equity sales while Leonteq announced that Hans Widler was appointed as CFO and a member of the executive committee.
Image: Vectorfusionart/Adobe Stock.
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