Technology companies continue to get attention from investors and product manufacturers which are using the flexibility of structured products to provide exposure to these assets.
Commerzbank is one of the latest providers to capitalise on the appeal and performance of the Shopify share which has been one of the most popular underlyings in the certificate section on the German and Austrian market, since it made it to the structured products market in late 2017, according to Anouch Wilhelms, director, equity markets and commodities, public distribution, Commerzbank.
"One of the most popular share underlying this year [has been] the Shopify share," said Wilhelms. "We have decided to offer this underlying for discount certificates as well as leverage products (knock-out warrants and call/put warrants) because we found the company founders and their success story interesting."
Shopify was founded in Canada by two Germans and since then the firm has become very successful, according to Wilhelms. "In 2015, they went public in the US and today the value of online shopping kits is over US$14 billion," said Wilhelms. "We started offering products in February for the first time and have since continuously issued new products."
Commerzbank has issued 18 discount certificates in February this year as well as tranche and continuous knock-out warrants on the single share for German and Austrian investors. The German bank has also issued four knock-out warrants (long) to Belgian and Dutch investors as of beginning of May.
The first issuer to offer this underlying was CIBC which targeted Canadian investors with a one year subscription based, capital-at-risk note, CIBC Accelerated Return Notes linked to Shopify Inc., Series 1 (USD) (sales volume: US$1.3m) with a capped call/enhanced tracker payoff, in May 2017. Later in 2017 also Morgan Stanley offered for its US American investors a three-year autocallable note Contingent Income Auto-Callable Securities - Shopify (61768J177) (Sales Volume: US$1.6m). Credit Suisse issued a one-year autocallable to US investors on a share basket including the Shopify share, the Autocallable Reverse Convertible Securities - Worst of Option (22549JMW7) which sold US$0.8m.
In the European market German brokerage house Lang und Schwarz has issued 14 knock-out warrants on the single share since November last year to German and Austrian investors. Citi has also targeted German/Austrian investors with a number of knock-out warrants linked to Shopify, since March 2018.
Shopify had its IPO in 2015 and was listed at a share price of US$17 (US$136.13 as of May 2018). Shopify is a Canadian proprietary e-commerce platform. The company is headquartered in Ottawa and offers a proprietary e-commerce platform for online stores and retail point-of-sale systems.
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