Dutch issuers react to ABN Amro IPO with turbos

The initial public offering (IPO) and listing of ABN Amro, on November 20, has led to the launch of a number of investment products linked to the Dutch bank which, for many investors, still has a nostalgic value. BinckBank, BNP Paribas, Commerzbank, Goldman Sachs and ING have all reacted to the IPO by issuing leverage products linked to the ABN share while Euronext today announced the launch of spotlight options on the bank.

"What really stands out is that almost all issuers of turbos from day one had turbos linked to ABN Amro on the market," said Christophe Cox (pictured), derivatives public distribution for Belgium and the Netherlands at Commerzbank. All issuers have been pretty reactive, said Cox. "Usually, it takes several days or weeks before a new underlying is picked up by investors, but, in the case of ABN Amro, we already see good trading figures."

"We have seen a fair number of trades on sprinters linked to ABN Amro, something you can also see on the exchange," said Zico Yeh, head of structured investments at ING Commercial Banking. "Other parties have also issued turbos on ABN Amro. For the Netherlands this is of course a nice issue."

If you look at the Euronext statistics from November 1 until November 25, ABN is ranked 38 as the most traded underlying, according to Cox. "That's not bad for a newcomer which only launched a week ago," he said. "Investors are trading fiercely in these products. Also, if we are looking at the spreads of the turbos linked to ABN Amro, these are very, very competitive." At Commerzbank, both the 'classic' turbo and the 'Best' version are actively traded at the moment, said Cox.

Meanwhile, Euronext launched spotlight options on ABN on its Amsterdam derivatives market, which are available as of November 26. Spotlight options give additional visibility to underlying assets through a combination of liquidity provider support and promotion by sponsoring brokers. The options classes initially have short-term maturities of one, two and three months. Liquidity in the ABN options will be supported by 323 Trading, Caerus, IMC Trading, Kemp Trading, Optiver, Scrocca Option Trading, Susquehanna and Commerzbank, who all will act as liquidity provider, said the exchange.

These options provide significant added value to the liquidity of the underlying assets and diversify the investment opportunities for retail and professional investors in ABN, said Adam Rose, head of financial derivatives at Euronext.

The ABN share was quoted at €19.59 per share on Thursday up 3.5% from the initial offering price of €17.75 on November 20.

ABN was nationalised in 2008 after the credit crisis. The nationalisation cost the Dutch state around €22bn. Last week's IPO concerns only 20% of the shares, with the remainder to be sold off in phases.

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Dutch issuers react to ABN Amro IPO with turbos