SRP’s Asia Pacific awards 2020 were handed out virtually, with myriad banks from across the region scooping up prizes for their performances in over 30 categories.
Australian fintech startup Stropro Technologies won SRP’s Best Educational Initiative award, for its Knowledge Hub platform, which helps Australian investors navigate the world of structured products.
Stropro was selected by a panel of judges for its holistic approach to investor education which includes “a number of traditional and digital formats including email, events, seminar, webinar, online modules, as well as investor touchpoints and experiences within the platform”.
A unique aspect of the firm’s model is that it keeps the integrity of the original note from issue intact – an approach that resonates with Australian investors who want clarity and simplicity.
The Hong Kong Exchange (KKEX) won SRP’s Best Structured Products and Derivatives Exchange and Most Innovative Solution awards, the former for the 13th consecutive year, achieving a number of milestones in its domestic structured products market throughout the year
The total turnover in securitised derivatives, including derivatives warrants (DWs), callable bull/bear contracts (CBBCs) and inline warrants reached HK$4.5 trillion (US$569 billion).
The average daily turnover (ADT) of DWs, CBBCs and inline warrants traded on the HKEX registered HK$18 billion, accounting for 21% of total market turnover.
“The launch of inline warrants is the first new product in 13 years, as part of our strategic plan to accelerate the pace of new product development and to enhance the attractiveness of Hong Kong as the global markets leader in the Asian time zone,” said head of markets and managing director Wilfred Yiu, adding that these products provide a new choice of structured product for investors.
Credit Suisse was one of the most rewarded firms, scooping five awards including Best House Asian Equities, Best House South Korea and Most Innovative Index.
In 2019, Credit Suisse deepened its footprint in the content and platform solutions space, supported by infrastructure, and continued to invest heavily in its Asian franchise.
“We stepped up on our capability and flexibility in offering actively managed certificates [AMCs] and thematic delta one notes,” said Charles Firth, managing director, Asia Pacific solutions. “This easy-to-manage implementation of multi-asset strategies, coupled with effective generation of reporting, has received solid traction in the region, and supports the private banks’ shift in focus towards products that generate recurring revenue.”
Credit Suisse is also a pioneer in its structured credit business in the region and is committed to educating and handholding clients on the use of special purpose vehicles (SPVs) - bond repackaged notes issued by SPVs via the SPIRIT platform has grown in receptiveness over the last year, according to Firth.
Last week also kicked off quarterly earnings time for many banks, with Covid-19 still very much a feature weighing on the industry. Swiss investment bank UBS’s net profits declined to US$1.24 billion in the second quarter from US$1.6 billion in Q1, and US$1.4 billion in Q2 19. UBS has been one of the second most active issuer globally (32,800 products) and sixth by market share (US$3.4 billion/3.1%) including non-retail products in Q2 20, despite a drop in issuance and sales year-on-year (Q2 19: 18,500 products/US$4.2 billion), according to SRP data.
Over in the US, Morgan Stanley has reported a positive second quarter performance with a 41% jump in net revenues of US$13.4 billion from the first quarter of 2020 and a 31% increase year-on-year.
The figures are indicative of the firm’s strong comeback from a difficult first quarter brought on by the Covid-19 pandemic, in which net revenues slid to US$9.5 billion from US$10.3 billion in the same period of 2019. UK-based sponsor of physically backed exchange-traded products (ETPs) Leverage Shares entered the market in early June with a focus on US stocks. Oktay Kavrak, CFA – institutional sales said while these products are very popular in markets where self-directed investors seem to be into trading very risk-on products such as certificates and warrants, they aren’t yet in the UK.
“It could be a cultural thing - UK investors seem focused on investing for the long term - they have some passive investments that grow over time, and don’t want to speculate that much. Investors in countries like Italy and Germany are more aggressive including professional day-traders,” he noted. “A study done on trading in more speculative products in Asia attributed their popularity to pillars like sound legal frameworks and transparency – so these factors definitely play a role.”
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