Eight structured products were added to SRP's Dutch database during November. BNP Paribas launched six Rendement Certificates linked to single shares. The certificates, which have a term of just over one year, are aimed at investors who envision limited movements in the financial markets. The French bank also issued the Aegon 9% Memory Coupon Note November 2015 - 2018, its 13th memory coupon note this year.
Memory coupon notes have become a real feature of the Dutch market in recent months. Market leader Kempen introduced three memory coupon notes via trading on the Amsterdam exchange. "The good news is that, both internally and externally, we have had a spin-off that means we were able to issue some private placements on the back of the public offer," said Laurent Guntenaar, director structured investments at Kempen. For the public offers, Kempen had a coupon barrier of 100 and a redemption barrier of 50. "Some clients said, 'you have now chosen a specific structure, could we have a coupon barrier of 60 and a redemption barrier of 60?' Making the product more defensive," said Guntenaar. "So the number of private placements we did, all memory coupon notes, all had different conditions."
Kempen is one of only three providers which have issued structured products for retail clients in 2015; BNP Paribas and ING are the other two. ABN Amro and Commerzbank which were both active in 2014 have not launched any products this year. The former closed its equity derivatives desk in June 2014 while Commerzbank's focus currently lies with leverage products.
Twenty-two structured products reached their maturity in November. ABN Amro's Wereld Garantie Note November 2009-2015 provided a return of 148.7% after six years, or 6.8% per annum. The note, for which BNP Paribas took over the market making activities in Septermber 2014, was linked to a weighted basket comprising the S&P 500, Eurostoxx 50, Nikkei 225, MSCI Emerging Markets and MSCI Pacific ex Japan.
Kempen's UBS Trigger Certificaat Eurozone 14-19 knocked out at the first time of asking, returning the nominal invested plus a coupon of 10%. Kempen issued a follow up in November in the shape of UBS Trigger Certificaat Eurozone 15-20 this time offering a coupon of 10.5% per year elapsed.
The initial public offering (IPO) and listing of ABN Amro, on November 20, 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 all reacted to the IPO by issuing leverage products linked to the ABN share while Euronext launched 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, 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."
The Dutch regulator Authority for the Financial Markets (AFM) has conducted research on the behaviour of self-directed investors (also known as non-advised or execution-only investors). The report consisted of an extensive review of the academic literature on investor behaviour and performance to identify the major psychological factors affecting retail investors; an assessment of the online investment platforms of four major providers; interviews with 14 self-directed investors to investigate the way they make investment decisions and, particularly, their reasons for investing the way they do; and a survey of 500 self-directed investors to assess which level of investor protection they deem desirable.
"Our research showed that [...] actual investor behaviour differs significantly form how regulators and policy makers assume, expect and would like investors to behave," said the AFM.
The full market review for the Netherlands will appear shortly.
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