Shinsei Securities has paired the Eurostoxx50 index with the domestic Nikkei225 in an underlying basket for the first time in Japan's uridashi structured product market.
The Tokyo-based company issued two dual index products yesterday, one using a combination of knockout, protected tracker, and reverse-convertible payoffs, and the other with the same payoff structure and an additional digital option.
"In regards to the newly introduced Eurostoxx50 and Nikkei225 index basket, we tested the water by launching it first in the private placement arena and we received much positive feedback from our clients," said Taro Katsuki from the product solutions division at Shinsei. "With the current state of market volatility and the solid feedback we received, we thought it is the right time to introduce this structure to retail investors."
The Eurostoxx50 index is not a widely used asset in Japan's structured product market and has only been featured in 11 products. Most recently Mitsubishi UFJ Morgan Stanley Securities marketed four products linked solely to the index, which have raised more than $400m year-to-date, according to SRP statistics.
Addressing the general lack of public awareness of the Euostoxx50 index among retail investors, Katsuki said Shinsei is conducting internal training for its staff to ensure professional knowledge about the products and to avoid potential mis-selling.
"Investors would find the product appealing given its much lower knock-in barrier of 49% initial capital compared to the market standard, and the general understanding that European equities are trading at attractive valuations as the eurozone has staged a notable recovery in recent months," he said. "We have plans to continue issuing multi-index-linked products and pioneering new structures that are intrinsically different to the competitors to help our clients diversify their risks."
Shinsei Securities is an active issuer of structured products with sales so far this year of $536m from the launch of 22 products.