Bankers Say Asia Structured Note Sales to Slow on Low Volatility By Regina Tan Jul 4, 2014 Ten out of 14 bankers who oversee product structuring or sales say growth will slow or not change from the first half, according to the survey conducted June 19 to June 30. Low volatility in underlying financial assets was the most commonly cited reason. The expectations for a slowdown mark a shift after fifty-three percent of bankers surveyed said sales at their financial institutions had increased in the first half from the same period in 2013. Record-low interest rates and unconventional monetary easing by central banks in the U.S., Europe and Japan have reduced price swings across markets, the Bank for International Settlements said in a report last week. “Most structured notes involve clients selling some form of optionality in order to generate premium to increase the coupon of the structured note,” said John Goff, Hong Kong-based head of global markets structuring for Asia excluding Japan at Nomura Holdings Inc. “So when volatilities are low, and they are low across asset classes versus historicals, it makes it more difficult to find value in traditional types of yield enhancement products.”
Posted on: Fri, 04 Jul 2014 10:26:33 +0000
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