BNP Paribas has entered the exchange-traded products market in Spain with a range of leveraged products offering bullish or bearish exposure to Ibex 35, Dax & Eurostoxx 50 indices which have been listed on the Spanish stock exchange’s warrants, certificates and other products segment.
The launching of BNP Paribas’ constant leverage new product range, called ‘multi’ in Spain, is aimed at providing new underlyings and different leverage/short levels to address the needs of different investors’ views as we develop our range of exchange-traded investment products in Spain, said Alejandro Serrano de Miguel (pictured), head of exchange traded solutions at BNP Paribas Spain.
“Multis are exchange-traded products (ETP) that track the daily performance of the Ibex 35, Dax & Eurostoxx 50 indices offering bullish and bearish exposure of 5 or 10 times,” said Serrano de Miguel.
The new BNP Paribas range widens the underlyings available in the Spanish stock market and its offer of products linked to shares, indices and commodities, as well as the 5x/10x multiplying factor on the Dax and Eurostoxx 50 indices.
“We believe the 5x/10x multiplying factor is the most appropriate for this kind of structure as investors are seeking real leverage on their views,” said Serrano de Miguel. “Multis provide ‘unlimited’ gains and ‘limited’ losses and the markets are showing that these products can actually do that and we are confident this segment will continue to grow in Spain.”
|
ISSUERS |
2014/08/29 |
2015/08/31 |
|
BNP PARIBAS |
1,203 |
1,244 |
|
BBVA |
1,188 |
1,230 |
|
COMMERZBANK |
961 |
1,041 |
|
SOCIETE GENERALE |
925 |
879 |
|
BANCO SANTANDER |
370 |
398 |
|
CAIXABANK |
138 |
93 |
|
Source: BME |
4,785 |
4,885 |
The first leverage certificates began trading in the Spanish stock market in February 2013, with issues offering exposure to the performance of Ibex 35 leverage net x3, Ibex 35 short x3, Ibex 35 leverage net x5 and Ibex 35 short x5. Trading of the first issues linked to the performance of Ibex 35 leverage net x10 e Ibex 3 short x10 indices began in March 2015.
The competitive landscape remains narrow with only four providers active in this segment including Societe Generale, Commerzbank, BBVA, and BNP Paribas with the differences between the products offered by the different providers being marginal.
“Spain’s ETP market is still small compared to other European markets (Eusipa report Q2 2015) where ETPs drive most of the activity in the structured products market, but the trading volumes suggest that ETPs are getting increased traction among Spanish investors,” said Serrano de Miguel. “The development of this market also shows how investors with some financial knowledge are looking for investment alternatives that can accommodate opportunistic views on the market as opposed to the more traditional buy-and-hold capital protected products.”
|
Warrants segment |
|
|
|
Date |
Nº of trades |
Turnover (EUR) |
|
Aug-14 |
12,270 |
52,137,764 |
|
Sep-14 |
15,989 |
64,612,332 |
|
Oct-14 |
21,343 |
78,605,539 |
|
Nov-14 |
16,603 |
52,808,089 |
|
Dec-14 |
19,705 |
76,934,218 |
|
Jan-15 |
24,421 |
109,386,301 |
|
Feb-15 |
22,954 |
110,711,764 |
|
Mar-15 |
21,480 |
115,151,537 |
|
Apr-15 |
20,889 |
105,751,002 |
|
May-15 |
19,413 |
92,707,227 |
|
Jun-15 |
22,660 |
106,006,520 |
|
Jul-15 |
19,984 |
93,115,629 |
|
Aug-15 |
16,835 |
85,397,671 |
|
Source: BME |
254,546 |
1,143,325,592 |
According to the Spanish stock exchange, Bolsas y Mercados, the trading volume on the warrants and certificates market in the first eight months of the year reached €818.2m, up 49.7% year-on-year. The trading volume in this market in August reached € 85.4 million, up 63.8% from August 2014.
The Spanish Branch of BNP Paribas will act as the liquidity provider.