Structured product veterans join wealth management specialists while volume and issuance levels in Asia Pacific come under scrutiny.
Tom Naratil has decided to part ways with UBS and will ‘step down from his current roles’ as co-president global wealth management and president UBS Americas effective 3 October 2022 after almost 40 years at UBS and its predecessor firm, PaineWebber.
Naratil has been co-president global wealth management (GWM) alongside Iqbal Khan since 2018. He will be replaced by Naureen Hassan who joins the Swiss bank from the Federal Reserve Bank of New York as president UBS Americas and CEO of UBS Americas Holding.
Another long-standing structured product expert, head of structured product sales and development at Credit Suisse, Rose Lee, has joined Rockefeller Capital Management to oversee products for its Global Family Office. She joined Rockefeller as managing director and head of investment solutions and will serve on the company’s management committee. She will be based in New York and reports to Christopher Dupuy, co-head of the Rockefeller Global Family Office.
The evolution of the equity derivatives franchise was very timely in the context of the building of a global equities platform - Renaud Meary, BNP Paribas
Ex-BNP Paribas cross asset sales Karrie Fung has joined Union Bancaire Privée (UBP) as managing director, Asia head of structured products based in Singapore. Effective from 5 July, Fung is responsible for wealth management and investment services as well as for ‘creating timely and targeted structured product solutions’ for clients in Asia. She is currently based in Hong Kong SAR and will relocate to Singapore at the end of August, reporting to Roger Meier, managing director, head of sales & client trading for Asia at UBP. Meier was poached from Julius Baer in April to take on a newly-created position after spending nearly 20 years at the Swiss private bank.
Staying in Asia Pacific, SRP has registered 2,352 structured products issued by a group of 11 local and foreign banks in China in H1 22, the majority of which were structured deposits. Bank of China topped the league table by issuance – the largest Chinese bank by market cap marketed 997 structured deposits, featuring payoffs such as range accrual, digital and shark fin. With a typical tenor of less than one year, the products are linked to a total of eight FX pairs led by EUR/USD and USD/JPY.
In South Korea, a market comprising equity-linked securities (ELS), equity-linked bonds (ELBs), derivative-linked securities (DLS) and derivative-linked bonds (DLBs), Samsung Securities kept its crown with the largest market share of 10.53% by issuance amount, or KRW3.2 trillion (US$2.4 billion), according to SRP data. Trailing closely behind is Mirae Asset Securities, which advanced from the fourth place after collecting KRW3.1 trillion from 802 products in the first six months year-on-year – they comprise 666 ELS, 102 ELBs, 21 DLBs and three DLS.
In an interview with SRP, Renaud Meary, global head of equity derivatives at BNP Paribas, said that the bank’s equity derivatives franchise has historically mostly relied on its two main strengths: structured products and Delta 1 (dividend, repo etc…), but “the ‘wake-up call’ of 2020 forced issuers to review business models.
“We shifted our strategy to focus on the flow side of the business while de-risking the distribution side of its offering, through the risk management and risk recycling actions, and through a diversification of our offer in that space,” he said. “In order to foster this new ambition on the flow side, we have invested in capabilities and talent including a number of high-profile hires last year to boost our flow trading set-up.
“The evolution of the equity derivatives franchise was very timely in the context of the building of a global equities platform.”
According to Meary, the integration of DB’s prime brokerage business and of Exane cash equity business brought the missing pieces of the puzzle, solving the equation for the bank's flow and corporate derivatives businesses.
Morningstar Indexes has increased its profile in the structured products market over the last few months with a number of high profile retail transactions in different geographies including the recent launch the Morningstar Developed Europe Renewable Energy Select 30 Decrement 5% EUR Index in the Nordics and the Morningstar Exponential Technologies ESG Screened Target Volatility 7% Select Index, in China and Malaysia, in May and June, respectively.
Julien Thibaud, director, global team lead banks, Morningstar Indexes, noted that index customisation for the structuring space is a given in the current market environment. Our bank partners face challenges mainly around derivatives pricing, tradability, and the investment goal they are trying to achieve. This can be partially addressed within the index design. Therefore, we work closely with our partners to find a balance that provides investor friendly pricing and index purity.
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