Erste Investment is marketing Protect Multi Kupon Express US Big Data to retail investors in Hungary. The three-year certificate, for which subscription opened on January 4, is issued by Credit Suisse and linked to a basket featuring the 'big data' shares of Oracle, Amazon and Hewlett Packard.

In 2017, an increasing number of banks and investment companies started to offer 'worst-of' structures in Hungary, but only for private banking clients, according to Adam Varga, head of product development and segment management at the Hungarian branch of Erste Group Bank. "[Worst-of products] are getting popular, but the core products are still government bonds and investment funds," said Varga.

The certificate offers a semi-annual coupon of 4.8% (9.6% pa), providing the share with the weakest performance are at or above 60% of their initial level. However, if each stock is at the same level, or above its starting value on the observation date, the product is redeemed early, returning 100% of the nominal invested. The product is denominated in US dollars, which makes it possible to offer a relatively high coupon, and the nominal amount per note is set at US$2,000 per note.

"Private banking and 'Erste World' (our upper mass affluent (just below private banking)) clients are the main focus for this structure," said Varga.

Due to the increasing demand for theme baskets, Erste is concentrating on reverse convertibles and autocalls with 'worst-of' features. "We definitely would like to broaden our portfolio," said Varga. "We are analysing the possibilities. Introducing new structures is usually time-consuming; first of all, it demands a lot of work from headoffice, and also presents a steep learning curve for sales and the clients," he added.

'Big data' aside, Credit Suisse has also offered the same structure on themes like US consumer goods, European insurance, Germany and construction during 2017. Since January 2016, the Swiss bank has issued 26 securities of the 'Multi Kupon' variety in Hungary, initially via Citi, and now, since the beginning of last year, via Erste Investment. The structures include products denominated in US dollars, euros, and Hungarian forints.

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