The focus is very much on all things indices this week, as SRP releases its first report on the topic.
The report, SRP’s first on the topic, and the most exhaustive piece of research in the industry, is available to download here.
Turning our attention to the wider industry, J. P. Morgan has led a US$5m series A funding round to drive MerQube’s international expansion and accelerate platform development. The round included participation from venture investing firm ThirdStream Partners, hedge fund managers Benjamin Smith and Sheehan Maduraperuma, co-founders of Laurion Capital Management, and several other financial market professionals. Jason Sippel, head of global equities at J.P. Morgan, said the investment underscores J.P. Morgan’s focus on investable indices and structured products.
“Globally, our clients are looking for exposure to ever more agile index strategies. J.P. Morgan’s collaboration with the MerQube team will further enhance our work to deliver market-leading, next generation index solutions,” he said.
Use of AI will move from niche to mainstream fairly quickly - Roberto Lazzarotto
Following his appointment as CEO of Yewno earlier this month, the former global head of sales at Qontigo, Roberto Lazzarotto, told SRP about how the Palo Alto-based firm is seeking to help ‘uncover the undiscovered’ through its new inference engine, and its application in the structured products market.
Yewno is a start-up with six years in the market offering its inference engine to enhance human understanding by correlating concepts across vast volumes of sources. One of the difficulties index providers have is that they must navigate through many databases, which are not necessarily clean and have inconsistencies that create a lot of issues.
“When you consider big data, you have the same problem as the web and other sources are full of uncleaned data, he says. “We want to change that perception too. The data inputs into the Knowledge Framework are unbiased, which makes the outcome reliable, and doesn't need to be re-crunched and reprocessed to separate the good from the bad. All those elements will change the way that investments will be done going forward and use of AI will move from niche to the mainstream fairly quickly.”
Over in Switzerland, the local Structured Products Association (SSPA) has added Swissquote Bank as a new buy-side member. There are now eight representatives on the SSPA’s buy-side and the membership base has been expanded to a total of 42 members across the entire value chain, from issuers to trading platforms and buy-side to brokers and partners.
Staying in Europe, Peter Bösenberg has been promoted to head of public distribution Germany & Austria after over five years as head of cross asset distribution Germany & Austria, at Société Générale Corporate and Investment Banking (SGCIB). He will continue to be based in Frankfurt and will report locally and functionally to Klaus Oppermann, head of public distribution Europe, at the French bank. Bösenberg has been a driving force in the build-up and development of SG’s German digital platform of structured products and cross asset solutions for Germany and Austria. He joined the French bank in 2002 as a trainee in sales trading - warrants & certificates.
Abu Dhabi Islamic Bank (ADIB) has launched ADIB Wealth portal, a new multi-channel platform to access investment products. It features a dashboard that gives customers a 360-degree view of their investment portfolio and ability to track the performance of their holdings. The new portal is part of the bank’s Wealth Management offering which includes a diverse range of wealth management products such ADIB’s Khuttati - My Plan, which provides customised savings and investment plans, as well as private equity products, low-risk structured products, third-party mutual funds, sukuk investment products, and alternative investments.
China Citic Bank has further decreased its issuance of structure deposits in the first half of the year as the total outstanding balance at Chinese banks reached a historical low in June.
The corporate balance of structured deposits fell 63.1% to CNY132.1 billion (US$20.5 billion) at the Chinese bank year-on-year (YoY), or down 25% from six months ago, at the end of June. The figure accounted for 3.7% of its corporate deposits, which was a 1.38% decrease YoY and ‘a relatively low level among joint-stock banks,’ the bank stated in its H1 21 financial report.
Since the Chinese regulators began to curb down the structured deposit issuance in the fall of 2019, the market has significantly shrunk with the outstanding balance hitting a historical low at CNY6.04 trillion as of 30 June, 57.3% of which was attributed to medium and small-sized banks. Specifically, corporate and retail customers accounted for 65.8% and 34.2% of the balance at these banks.
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