Market reviews, Q2 earnings, a J.P. Morgan lawsuit, and Citic Securities’ progression in Europe, were among the topics covered by SRP’s news desk last week.
The past week saw the release of our Thailand market review for the second quarter of 2024, which reveals a seasonal slowdown in the structured note space while two local nascent issuers stood out.
A total of THB 26.8 billion (US$756.6m) notional traded from 6,119 structured notes, including 348 dual currency notes were issued during the quarter, down 12.6% from the previous quarter, but up 5.8% year-on-year (YoY).
We also looked at the activities in Asia Pacific (Apac) and Europe through different lenses for the first half of the year.
In the Apac region (ex-China), the Athena structure, also known as growth autocallables with knock-in barriers, had an estimated sales volume surge around 80% YoY in the first half of the year, according to Spotlight on Apac H1 2024.
For the same period, four of the top 10 issuers in Europe came from Switzerland with the remaining providers also highly active in the country. Some 169,490 structured products (excluding flow) worth an estimated US$115 billion were issued across 21 different European markets in the first half of 2024 – up 19% by sales volume YoY, according to Top issuers Europe H1 2024: Swiss banks set the tone.
We saw strong growth in equity derivatives with good client demand driven by recovery in structured derivatives in Asia Pacific and the Americas - Lars Machenil, BNP Paribas
For the second quarter, BNP Paribas saw recovery in Apac and the Americas as it reported a 57.5% increase in equity & prime services revenues YoY driven by equity derivatives.
‘We saw strong growth in equity derivatives with good client demand driven by recovery in structured derivatives in Asia Pacific and the Americas,’ said Lars Machenil, BNP Paribas CFO, speaking at the Q2 2024 results webcast on 24 July.
At Six Swiss Exchange, the structured products turnover came to CHF729m (US$843m) in July, up 20% compared to the previous month and an increase of 39% YoY. The number of newly listed capital protected products reached its highest level since August 2022.
In the US, Citi has dropped to fourth place by registered structured note sales in Q2 2024 as the volume was down four percent to US$3.3 billion YoY, accounting for 10% of the market.
However, the US banking group reported net income of US$3.2 billion, up from US$2.9 billion YoY. Markets division net income rose 29% to US$1.4 billion.
Meanwhile, Morgan Stanley has maintained its momentum this year taking an increased market share with US$3.14 billion sales in this space in Q2 2024, in contrast to a decline posted by J.P. Morgan, Goldman Sachs and Citigroup on a quarterly basis.
For the quarter, Morgan Stanley’s net revenues of US$3.0 billion increased 18% YoY, primarily reflecting an increase in execution services and financing, particularly in Asia, partly due to increased client activity in derivatives and cash equities.
Also in the US, a Dropbox co-founder is seeking to recover US$225m in damages from J.P. Morgan Wealth Advisor and J.P. Morgan Securities due to “exorbitant” undisclosed fees on 35 structured notes with combined principal amount of nearly US$1 billion sold between April 2020 and October 2023.
In people moves, Société Générale has appointed Fouad Farah as head of global banking and advisory, replacing Demetrio Salorio. Farah reports directly to Anne-Christine Champion and Alexandre Fleury, co-heads of global banking and investor solutions. He remains part of the group management committee and will be a member of the GBIS executive committee.
The French bank last week issued Phoenix Taux CMS 10 ans Mai 2024 in its home market. This 12-year, capital protected autocall is linked to the 10-year EUR constant maturity swap (CMS) rate, as highlighted in the week’s product wrap.
In addition, SRP reviewed how funds from Peru, Luxembourg, the UK, Ireland and Canada performed during H1 2024 in the third and final part of our roundup, including Fondo Zest Estructurado, Forte Pharma Fund and Lowes UK Defined Strategy Fund.
In Asia, Seoul-based AI fintech firm Qraft Technologies has co-designed an AI-powered index with Solactive to replicate a hedge fund’s long-short investment strategy, which has been traded via structured products sold in South Korea.
Meanwhile, a year and half after entering the European market, the offshore arm of China’s Citic Securities has extended its structured product trades to Switzerland, the UK and the United Arab Emirates (UAE).
The state-owned securities house has tapped Switzerland’s Finanzlab to deploy its structured note into an open-ended fund. It is one of several product developments from the Chinese investment bank, which is expanding its footprint in Europe, Middle East and Africa (Emea).
Image: Ron Alvey/Adobe Stock.
Do you have a confidential story, tip, or comment you’d like to share? Write to info@structuredretailproducts.com