The structured product markets are never on holiday it seems, with senior staff moves and new product and partnership appointments continuing unabated.

HSBC has replaced Ishan Sarkar following his appointment as head of capital markets, Southeast Asia (SEA) at HSBC global private banking (GPB).

Arnaud Gauthey has been appointed as director, head of structured products for SEA at HSBC based in Singapore, effective today (1 September). Gauthey reports to Ishan Sarkar with responsibility for the structured products and derivatives business at the bank’s wealth and GPB segments in the region, according to sources.

He joined the UK bank in Singapore in March 2019 in charge of advisory, origination and marketing for cross-asset structured products and derivatives. Gauthey also had responsibility for structuring of non-flow and bespoke solutions for ultra-high-net-worth clients.

Equity-linked products make up the largest proportion of global structured product markets

Another bank that also has appointment news is Natixis. Effective from August, Guillaume Calvino is managing director, global head of equity structuring, global markets at Natixis Corporate & Investment Banking (CIB), according to a spokesperson at the bank.

"This is a newly-created role which oversees the entire structuring team for the Equity business line," the spokesperson told SRP.

Based in Paris, Calvino reports to Elie Bitton, managing director, global head of sales & structuring at Natixis CIB. His previous role in Hong Kong SAR has been succeeded by Walid Gueriri, who is now executive director, Apac head of equity structuring at the bank, and continues to report to Calvino, according to the spokesperson.

As equity markets get choppy investors and issuers alike are looking at alternatives to diversify exposures and risk.

Equity-linked products make up the largest proportion of global structured product markets. However, other asset classes such as FX and interest rates are represented and particularly popular in some markets. For commodities, the forward price is generally calculated directly from traded futures. Commodities often have steeply declining forward prices (known as backwardation). This has a big effect on the pricing and product terms that can be achieved. As an example, Brent Crude Oil has a one year forward that is approximately 8.2% lower than the spot price. If we were to structure a product using this underlying it would be equivalent to using an equity with a dividend of 10.9%. This feature of commodity markets gives opportunities to structure attractive terms, and therefore strong product performance if the fundamentals are right.

Data from the US structured product service Structrpro.com illustrates the use of commodity products. Products linked to the Bloomberg Commodity Index are showing better than average returns for both live and matured products and a lower percentage of losses than the whole product universe. These results are underpinned by the fact that the index has been on an upward trend since March 2020 and that most products are protected or at-risk growth products. BCOM is up 34% in the last year compared to a fall in the S&P 500 of 5%.

In innovation news, Luma has partnered with Marex to enable financial advisors to tailor their cryptocurrency-linked notes to assets such as bitcoin and ethereum through the platforms Creation Hub Module.

Luma’s Creation Hub is an automated request for quote (RFQ) functionality aimed at simplifying the process for constructing and modifying custom deals through a customisable workflow that connects advisors directly to the pool of issuers onboarded at Luma.

In the US, both sales volumes and issuance suffered from the continued absence of Barclays. Some US$5.6 billion was collected from 2,192 structured products with strike dates in the US in July 2022.  

Sales volumes were at their lowest levels since July 2020 (when US$5 billion was accumulated from 1,843 products) and 30% below the 12-month average of US$8 billion. Compared to July 2021 products sold 33% less while month-on-month (MoM) figures showed an 18% decline.

The last time issuance was this low was November 2020 (1,862 products). Year-on-year (YoY) issuance was down 11% and compared to June 2022 12% fewer products were issued.

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