Another busy week in the structured products world, including senior staff moves and product firsts. Our SRP Americas event returns next week too – see below on details to register.
Before we start: SRP will be hosting its first virtual Americas event next week, with speakers confirmed from Stifel, Monex, BMO, InnovatorETFs, Incapital, Credit Suisse, XP Investimientos, S&P Dow Jones Indices, Citi, STOXX and more! Registration is free here, so get in touch now to start networking on our virtual events platform.
High profile departures of structured product specialists from a number of firms globally continue. Mikael Axelsson, the chief executive officer of one of the main Swedish structured products distributor firms Garantum Fondkomission, has resigned from his position. He will part ways with the firm in October to set up a family office which “will of course use Garantum structured products” as part of its offering, he told SRP. Axelsson is a well-known figure in the structured products industry and has held a number of senior positions during a career that spans more than 15 years.
HSBC Bank USA veteran Todd Fruhbeis has parted ways with the UK banking group after 15 years. The New York-based wealth management sales for the America had responsibility for the sales of markets products for retail and high net worth distribution channels in the Americas, since 2005. Fruhbeis’ responsibilities will be taken over Christopher Rosen, managing director and head of institutional equity derivative sales, Americas, another long-lasting HSBC executive.
In this environment one of the themes we find interesting [...] is the concept of ‘strong balance sheet’ - Kokou Agbo-Bloua, Société Générale
In a first for the Hong Kong SAR warrants market, JP Morgan has issued two derivative warrants linked to S&P 500 on the Hong Kong Stock Exchange, allowing investors to get exposure to the US market during local trading hours. Cedric Cheung, head of listed structured products sales for Asia at JP Morgan, told SRP the US bank has initiated a plan to introduce at least 15 derivative warrants tied to the S&P 500 and Nasdaq 100 indices by the end of the year, including four Nasdaq 100 warrants launched and listed in the past week, in an effort to capture the US markets’ strong volatility throughout the year.
Another first saw the Saudi Stock Exchange (Tadawul) launch exchange-traded derivatives with the listing of the first exchange-traded derivative product in the form of an index futures contract - the Saudi Futures 30 (SF30). This contract is based on the MSCI Tadawul 30 Index (MT30). The launch of the derivatives market is aimed at growing the Saudi capital market by creating new opportunities for investors, providing them with hedging tools to manage risk, and to expand exposure opportunities to one of the largest and most liquid markets in the world – the Saudi Market.
US exchange-traded fund platform Innovator Capital Management has debuted the industry’s first ever defined outcome bond ETFs amid a historically low interest rate environment and sky-high bond prices. The ETFs provide upside exposure to bonds with built-in downside buffer levels and are intended to exist as a definitive solution to the current complexity that is the interest rate reality. Underlyings include Cboe Flex Options on the iShares 20+ Year Treasury Bond ETF. Both the Innovator 20+ Year Treasury Bond 5 Floor & 9 Buffer ETFs seek to provide exposure to the performance of the underlying ETF to a cap.
In an interview with SRP, Kokou Agbo-Bloua, Société Générale’s global head of flow strategy & solutions, and global head of economics, cross-asset & quant research within the bank’s global markets division, noted many investors are puzzled by the strength of the recovery in the equity markets when the short-term picture is gloomy.
“In this environment one of the themes we find interesting and think will resonate with investors is the concept of ‘strong balance sheet’ as a topic which can be delivered through a thematic basket or a QIS solution,” he says. “Our view is that after roughly US$1.2 trillion of corporate debt issuance in the US year to date which almost doubles what happened there last year and the fact that many companies were forced to leverage their balance sheets to survive, balance sheets are being challenged like never before in an economy that is going to struggle.”
Sweden’s Finansinspektion (FI) has withdrawn the authorisation of securities firm Exceed Capital Sverige AB. According to the decision, Exceed will be suspended and may no longer conduct regulated business as of 2 September.
FI's director general Erik Thedéen has urged market players to be mindful of consumer interests, and consider their needs and individual circumstances when providing advice about financial products.
An investigation by the FI found that that Exceed has continuously breached key customer protection rules within securities legislation. One example of this is that Exceed has advised customers, who are often older, to invest their savings in very complex and risky products without ensuring that they have had the necessary knowledge about the large risks. Another example is that the information that Exceed provided to its customers regarding fees was directly misleading. The company also hindered FI's work during the investigation, according to the regulator.