The Belgian Structured Investment Products Association (Belsipa) has reported primary market sales of structured products amounted to €1bn in the second quarter of 2018, up 12% from the first quarter. The increase was driven by life wrapped products (Class 23) which registered a growth of 46% - from €145m in Q1 to €211m in the second quarter - with volumes of notes and structured funds each rising by 5% during the period, according to the latest figures released by the trade body.

The EU legislation that was implemented in January, in particular the compulsory delivery and explanation of key information documents (Kids) to retail investors, had put considerable pressure on sales in the first quarter, however the figures for the second quarter show that these new rules have now been digested, according to Filip Gils (pictured), vice chairman, Belsipa. 'Compared to the first quarter sales volumes are up, as well as the outstanding volume in structured bonds and fund-related insurance products,' said Gils. 'This could indicate that retail customers are once again showing interest in our product portfolio.'

Florence Devleeschauwer, chairwoman, Belsipa, added that the return to normal market activity proves that customers have confidence in structured products which is a 'positive sign for the sector'. 'The growing number of leveraged products is typical of a normalised market and must be seen in the context of a relatively low capital that was invested in these products, which the sector only offers to our clients on request.'

The turnover of structured products sold on the secondary market amounted to €857m, a decrease of 20% compared to Q1 2018, with sales of Class 23 products and funds down by 19% and 22%, respectively.

In Q2 2018, equity-linked products sold €615m (+3%) on the primary market and €705m (-20%) on the secondary market while products with a fixed-income underlying registered a turnover of €307m (+11%) and €110m (-20%), respectively. Products with a commodity underlying are rarely seen in Belgium, and the second quarter was no exception - selling €20m on the primary market and €21m on the secondary market.

Eight hundred and ninety-one new structured products were issued in Belgium between April and June 2018, up 9% from the 818 new products in Q1 2018. The vast majority of all new products (88%) were turbos; structured notes increased by 23% compared to Q1 2018; and the number of structured funds by 33% in the same period. Equity-linked products represented a share of 85% of all newly issued products.

At the end of June 2018, over 3,300 products with an outstanding volume of €31.1bn were 'live' on the Belgian market, roughly the same as at end-March when 3,255 products worth €31.2bn were open/non matured.

Belsipa was founded in 2013 and has Belfius, BNP Paribas Fortis, ING Belgium, KBC, Societe Generale, Commerzbank and Natixis as full members. Next to them, also Axa Group, Crelan, Bank Nagelmackers, AG Insurance and Deutsche Bank provided data to the report, which covers approximately 95% of the Belgian market.

Click the link to read to full Belsipa market report on retail structured products 2Q 2018.

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