SRP Digest: new avenues

BNP Paribas has appointed Joshua Dunivant as head of global equities sales for the Miami office in anticipation of its opening later this year. He will continue to serve in his role as managing director, co-head of equity derivatives hedge fund asset manager sales for the Americas.

In the expanded role, Dunivant will focus on growing BNPP’s footprint in South Florida and across the Americas and work closely with Matthew O’Connor , head of the Miami office.  O’Connor took the role in early August, along with Annabella Espina who serve as chief operating officer at the Miami office.

We offer 100% capital protection and a return on the basket, sometimes we have a lookback, sometimes a minimum return, but it's a very simple, straightforward product - Kurt Verstegen, KBC

Geoff Simmons has joined HSBC as head of equity & QIS structuring, Americas , after almost nine years at Société Générale. Based in New York, Simmons reports to Thibaut de Rocquigny, global head of equity structuring, who is based in Hong Kong SAR.

During his time at the French bank, Simmons held several senior roles in equity derivatives and quantitative investment strategies (QIS) structuring including head of QIS structuring Americas and head of EQD QIS structuring global in London and New York.

He joined Société Générale as a financial engineer within the bank’s index business in New York, SG Indices, as became an associate, equity derivatives, in London in 2016, before being promoted to director level in 2021.

Over in South Korea, one of Asia’s most active markets, the outstanding balance of equity-linked securities (ELS) dropped for the fourth consecutive quarter in Q3 2023 , sitting at around KRW38.6 trillion (US$28.6 billion), according to Korea Securities Depository (KSD)’s report released on 18 October. For equity-linked bonds (ELBs), the outstanding volume remained stable at KRW25.6 trillion. The combined ELS/ELB outstanding amount reached KRW64.2 trillion, down 6.5% year-on-year (YoY).

In Hong Kong SAR, issuers of listed structured products are lining up as eight additional overseas single stocks become eligible as reference assets . Investors could not have missed the rally of the US stock market in 2023. During the first half of the year, over 400 derivative warrants (DWs) on US indices were listed on the Hong Kong Exchanges and Clearing (HKEX), up 67% from the second half of 2022, according to the exchange.

Those underliers – consisting of the S&P 500, Nasdaq 100 and Dow Jones Industrial Average – climbed 12%, 37%, and one percent respectively, year-to-date.

In a first for the market, Goldman Sachs listed two DWs linked to Apple on 27 September, followed by its issuance of two DWs on Alphabet a week later. According to Goldman’s executive director structured products distribution Angela Fung, GS aims to “bridge the gap between US and Asia trading hours” and address Hong Kong SAR retail investors’ demand for “round-the-clock investments in global equity markets” through the launch of DWs on US single stocks.

The first ever SRP Belgium Structured Products Forum took place in Brussels on 19 October. Capital protection remains the most important factor for Belgian investors, who historically have been very defensive, according to participants of Trends driving the Belgian structured products market panel.

“When we position our structured funds in the market, we aim them at step-in investors – clients that are maybe a little bit afraid to start investing because of volatility in the market,” said Kurt Verstegen, senior solutions development, KBC Asset Management.

KBC offers simple, plain vanilla products linked to a basket of up to 30 stocks.

“We offer 100% capital protection and a return on the basket, sometimes we have a lookback, sometimes a minimum return, but it's a very simple, straightforward product,” Verstegen said.

Investors in Belgium want simplicity, agreed Pierre-Yves Druenne, head of capital markets & insurance, at Deutsche Bank. The solution to answer those needs, at least at Deutsche, are fixed income products.

The FSMA moratorium and restrictions on the use of custom indices have had little impact on the way KBC does its business.

“We don't feel that the restrictions are hampering us from positioning our product offer to retail investors in Belgium. We do have buffers and jumpers, but mainly for the Central European private banking audience. In Belgium, obviously we don't, but I don't feel that is a big issue,” Verstegen said.