SRP Singapore · 2019. 4. 11. · SRP disclaims all warranties as to the accuracy, completeness or...

SRP SingaporeAwards Report 2019

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Editorial: Pablo Conde, Amélie Labbé and Jihye HwangData: Iveta Pekova, Veselin Krastev and Petar Dimitrov

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SRP SingaporeAwards Report 2019

SRP Singapore Awards Report 2019 1

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1.1 Introduction

Structured Retail Products Limited (SRP), part of the Euromoney group of companies, is a research firm based in London, New York, Hong Kong and Sofia, providing research and training services related to all aspects of structured products.

The company was founded in 2001 and clients include many of the major global financial services groups, financial regulators, stock exchanges, index providers and professional services firms.

SRP also owns and maintains the specialist industry website StructuredRetailProducts.com. The site was launched at the beginning of 2003 to answer the growing need for data-driven intelligence on the often opaque derivatives and structured products market. It has since become a leading online information resource for the global retail structured products industry, with nearly 5500 registered users and more than 21 million product listings (as of March 2019).

Copyright informationThis report is copyright © 2019 Structured Retail Products Limited. All Rights Reserved. Reproduction and distribution of this report in any form without prior written permission is strictly prohibited.

Furthermore

• It may not be sold for commercial gain, either in part or in its entirety.

• It may not be photocopied or printed for multiple use, with the exception of within the organisation for which it was purchased.

• It may not be distributed electronically or otherwise in a manner other than that described above.

IndemnityThe information contained herein has been obtained from sources believed to be reliable. SRP disclaims all warranties as to the accuracy, completeness or adequacy of such information. Use of this report is at your sole risk, and SRP accepts no responsibility for any problems or incidents arising from its use.

AcknowledgementsThis report would not have been possible without the support of the structured products fraternity across Asia. SRP would like to thank the participants in the SRP survey from January to February 2019, whose data underpins this report.

SRP Singapore Awards Report 20192

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This report is concerned with the manufacture of structured products in all product forms – including wrappers such as funds, notes, bonds, certificates, deposits and life assurance – and usually linked to equities, foreign exchange, commodities, hybrids and interest rates underlyings.

This report presents information on structured retail products markets across the Asia Pacific region. Although the term structured product is widely used in the financial community, it often means different things to different people.

For the purposes of this report, a structured product is an investment product providing a predefined return linked to the price of one or more underlying assets. These are usually financial prices, rates or indices, but in rare cases can be sporting or other events. The product can usually be broken down into a number of separate financial instruments, one of which is usually a derivative product.

Where a derivative is not used, the product will use derivative-based investment strategy or computation to provide the return.

Although simple warrants, listed options and

futures, and delta one products such as tracker funds, exchange-traded funds and exchange-traded notes are excluded, reference to these products may be made where relevant.

The report is based on both quantitative and qualitative analysis. StructuredRetailProducts.com (SRP) surveyed 289 structured product distributors across Asia between January and February 2019, collecting data on structured product manufacturers from the point of view of their distributor clients. The results from the survey form the basis of this report. Details of both the quantitative and qualitative analyses are available in the Methodology section of the report.

The report provides the following information:

1. a scope, methodology and management summary of the report’s key findings;

2. an analysis of the structured products market in the Asia Pacific region based on survey responses;

3. a separate analysis of the manufacturers by asset class; and

4. an analysis of top distributors’ awards.

1.2 Scope


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Description of the SurveyBetween January and Febaruary 28 2019 StructuredRetailProducts.com (SRP) surveyed Asian structured product distributors, receiving 289 responses. The survey was composed of three areas of investigation:

Part 1 QuantitativeWe asked respondents to the survey to specify up to three investment banks that they use for hedging purposes, for each asset class in which the respondent was active, and specify the volume of business for that asset class and the percentage split by bank.

Part 2 QualitativeThe respondents were then asked to rank the investment banks they dealt with for each asset class as 1, 2 or 3 (where 1 = below average, 2 = average and 3 = above average) according to three key service categories:

• price competitiveness;• innovation and structuring capability; and• client service pre and post-trade.

Part 3 Data validationCaptive votes and those representing internal transaction flows were excluded from the results. This includes votes cast by distributors that are part of banking groups which use their parent group for 100% of their activity and internal structuring desks. Also, votes were not included in the survey where:

• Providers vote for themselves.• We cannot confirm the identity of the respondent.• A respondent votes more than once and we

cannot resolve the duplication.

The survey results underpinned the 2019 SRP Singapore Awards, which were handed out on April 10 2019 during the 6th Annual Asia Pacific Conference in Singapore.

For the purpose of this report, the scores for each key service category for the individual banks are calculated by averaging. Service scores are, therefore, suggestive of the level of service that a client might expect to receive when working with an investment banking counterparty.

1.3 Methodology


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‘Markets love volatility,’ said Christine Lagarde, the managing director of the International Monetary Fund, in 2011. While she was referring specifically to the tough times the eurozone went through post-financial crisis, her statement also rings true in a wider international context.

Twenty-eighteen finished with a bang in the global structured products market, not least in Asia, where the year ended with mass share sell-offs on the back of the autocallable debacle, which affected a number of banks in the region. Add to this global economic uncertainty prompted by the never-ending sagas that are the US-China trade discussion, Brexit, the constant search for yield, the recessionary risk facing many markets and slowing national growth in China, and you can start to build a clearer picture of what is influencing market participants’ behaviour.

One key takeaway of SRP’s Singapore Awards 2019

survey* is that investors are adapting to changing and challenging market conditions notably by looking to make more informed investment decisions. In the words of one respondent, this means accessing ‘clear and accurate data for my investment decision’.

But results from a review of the performance of structured product providers in 2018 shows that there is still some way for manufacturers to go. Scores for services including price competitiveness, innovation and structuring capability, and pre- and aftersales service, were all down for the year, for the second year running. This means there is a slight mismatch between client expectations and service provision and innovation that needs addressing.

This year’s scores are: price competitiveness – 2.51 (2017: 2.59; 2016: 2.79) innovation and structuring capability – 2.47 (2017: 2.59; 2016: 2.71); and pre- and aftersales service: 2.47 (2017: 2.6; 2016: 2.566).

New and improved Fundamental metrics in the region are in the process of improving as Apac has been on the receiving end of positive asset flows and Chinese growth. In spite of this, volatility is set to continue

into the next few months, as demonstrated by the challenges outlined by survey respondents.

When it comes to issues specific to the equity markets, the so-called global market turmoil and

2.1 Management Summary: every cloud has a silver lining

Overall service scores

Source: Structuredretailproducts.com

0

0.5

1

1.5

2

2.5

3

Price Competitiveness Innovation and structuring capability

Client Service preand post-trade

Industrial Average 2016 Industrial Average 2017 Industrial Average 2018


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uncertainty mean that investors are looking to adopt defensive strategies not only to protect themselves from, but also to take advantage of fluctuations. Issues at the end of 2018 with autocallable products and equity-linked securities popular in South Korea – which saw some banks incur huge losses on some trades – have dampened market confidence.

Some of the things that investors want more of include better liquidity provided by market makers, downside protection and principal protection, new products (other than existing step-down structures), and fewer knock outs and rollovers. One person surveyed pointed out that ‘the market needs new equity underlyings and new payoffs which is helpful for hedge trading’ as well as a better range of shorter-term investment products to help deal with unpredictability.

Ongoing challenges in the equity markets have one respondent questioning whether current turnover levels can be maintained. Respondents dealing with foreign exchange-linked products also raised this issue of sustaining current activity levels. One mentioned specifically the challenge of sustaining returns over the medium term given ambient market volatility and another the need to ‘look for value amid widespread tightening of credit’.

Product innovation (or ‘more innovation’ as many respondents succinctly demanded) is a solution that came up repeatedly across the survey and across all asset classes polled. One mentioned that their team was ‘keeping an eye on several foreign countries to develop various products linked to different interest rates’ while another highlighted that ‘credit products with different underlyings and shorter terms are needed’.

One individual surveyed asked exchanges to provide not only a more varied range of products, but also innovate when it comes to Asia-specific futures and derivatives.

List of demandsGiven the slightly worried undertone of this year’s survey responses, it came as little surprise that the buy-side’s demands are quite extensive. Whereas one of the most common responses for the European survey was ‘nothing more,’ things

are a bit different for the Asia Pacific market participants. Unsurprisingly, because of the uncertainty that continues to prevail in the region, requests for ‘more information,’ ‘more tips’ and ‘more advice’ were more than numerous.

Mifid 2 has had a big impact on financial institutions in Asia, adding a new layer of compliance on how trades are handled and executed. While the scope of the rule, touted as the most significant reform to the financial services market in several decades, is firmly on EU markets, its effects in practice have been wide ranging – similar to the much-discussed General Data Protection Regulation which came into effect in mid-2018. As such, specific requests targeted at various service providers are well worth mentioning.

Respondents urged index providers to supply real-time hedging solutions and custom indices, a trend for solutions tailored to customers’ needs that is gaining traction in many areas of the structured products market.

Issuance platforms were met with a singular, more complex demand. Top of the list is one respondent, who expects platforms to ‘streamline dealer to relationship management workflow, price discovery on more than eight payoffs, order management, compliance reporting, best execution reports and lifecycle management’. In this respect, there has been a growing number of announcements in the news of issuer platforms offering so-called all-in-one services for the buy-and sell-sides, including lifecycle management tools.

Demands for technology providers centered on their ability to lower the cost of their services though requests for real-time data downloading capabilities and data access via APIs were also responses – similar to demands made in the EU survey SRP ran late in 2018 alongside the European awards.

For risk analytics companies, respondents said lower costs, easier to construct models and more functions would be greatly appreciated.

*SRP conducted the Singapore Awards survey between January 14 and February 28 2019. It gathered 289 responses.


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2.2 Issuance and volumes between 2015-2018

Outstanding Issuance and Volumes 2015 - 2018

Market share by sales 2015 - 2018

Market by total sales (USDm) 2015 - 2018

0

20,000

40,000

60,000

80,000

100,000

0

200,000

400,000

600,000

800,000

1,000,000

2015 2016 2017 2018

Outstanding sales volume (USDm) (LHS) Outstanding products issuance (RHS)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2015 2016 2017 2018

Hong Kong Japan South Korea Taiwan

0

20,000

40,000

60,000

80,000

100,000

120,000

Hong Kong Japan South Korea Taiwan

2015 2016 2017 2018


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According to 47% of all respondents in SRP’s Asia Pacific Awards Survey 2019, the autocallable will be the payoff to look out for in the region over the next year. This comes as little surprise as, in 2018, the payoff (and combinations involving it) held a market share of some 50% in key markets such as South Korea, Japan, Taiwan and Hong Kong. With 14% of all votes, the digital option came in second to almost mirror the results for the top two places from SRP’s 2018 survey. Next was the callable option, which attracted the support of approximately 10% of all respondents and replaced the worst-of option as the third most exciting payoff.

Of the remaining eight options, only the range and accrual accounted for more than 5% of all

responses, mainly owing to votes from Hong Kong, Taiwan and Singapore.

The worst-of option payoff saw its popularity drop the most (1% from 11% in the 2018 survey), and the number of those who put their faith in range and accrual also dropped slightly (down by 1% and 2.5% respectively). By comparison, 3% more votes were allocated to the shark fin compared to last year, as respondents from Singapore ranked it second only to the autocallable. At 4% of the total, the number of votes in favour of other options was also up from 2018 figures. Highlights included private equity, warrants and twin win, though it is worth pointing out that none of last year’s suggestions (namely, the lock in and accumulator) found their place in the 2019 list.

3.0 Trends & Predictions

What will the most popular payoffs be over the next 12 months for your market?

Autocallable47%

Worst-of Option1%

Digital14%

Callable10%

Range6%

Accrual6%

Shark Fin4%

Protected Tracker4%

Other 4%

Dual Currency3%

Reverse Convertible1%


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The most prominent investment themes anticipated by respondents in the survey centered around equities in emerging and developed markets for the second year in a row (29% and 42% of all votes respectively). Volatility-based investments also kept their third place in the overall ranking, as trust increased very slightly in credit investments (7% compared to 6% in the 2018 survey).

Slightly fewer votes pointed to alternative investment themes (down 2% compared to last year’s results), and the list comprised topics related to principal protection and defensive investments, as well as the dynamic between performances in emerging and developed markets.

Which of the following investment themes will be the most prominent over the next 12 months?

Equity - Developed Markets42%

Other3%

Equity - EmergingMarkets

29%

Volatility-basedinvestments

12%

Credit7%

Proprietary/Custom indices4%

Environmental SocialGovernance (ESG) 3%

3.0 Trends & Predictions


4.0 Manufacturer Awards

Manufacturer awards are calculated on the basis of the following factors:

• Survey of Market- price competitiveness (25% weighting) - innovation and structuring capability (25% weighting) - client service pre and post-trade (25% weighting) - sales volume (25% weighting)

• Editorial SubmissionEach shortlisted manufacturer will need to submit an editorial piece of up to 400 words.

The winner will be selected by an independent panel of judges convened and chaired by SRP.

Best House, EquitySurvey ranking Editorial ranking

Price Competitiveness Innovation and Structuring Client Service

0

5

10

15

20

25

30

Credit Suisse JPMorgan Morgan Stanley SociétéGénérale

UBS

Best House, Asia Pacific Survey ranking Editorial ranking

0

5

10

15

20

25

30

Credit Suisse JPMorgan Morgan Stanley Nomura Société Générale

Price Competitiveness Innovation and Structuring Client Service 0 2 4 6 8 10

Société Générale

Nomura

Morgan Stanley

JPMorgan

Credit Suisse

0 1 2 3 4 5 6 7 8

UBS


Morgan Stanley

JPMorgan

Credit Suisse

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Best House, Asian Equity

Best House, US Equity

Best House, Foreign Exchange

Survey ranking

Survey ranking

Survey ranking

Editorial ranking

Editorial ranking

Editorial ranking


0

5

10

15

20

25

30

Credit Suisse HSBC Bank JPMorgan Société Générale UBS


0

5

10

15

20

25

30

Credit Suisse Goldman Sachs MorganStanley

Nomura Société Générale


0

5

10

15

20

25

30

BNP Paribas Citi Credit Agricole Nomura Société Générale

0 1 2 3 4 5 6 7 8

UBS


JPMorgan

HSBC Bank

Credit Suisse

0 1 2 3 4 5 6 7 8


Nomura

Morgan Stanley

Goldman Sachs

Credit Suisse

0 1 2 3 4 5 6 7 8


Nomura

Credit Agricole

Citi

BNP Paribas


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Best House, Credit

Best House, SEA

Survey ranking

Survey ranking

Editorial ranking

Editorial ranking


0

5

10

15

20

25

30

Citi Deutsche Bank Goldman Sachs Nomura Société Générale


0

5

10

15

20

25

30

Citi Credit Suisse Morgan Stanley SociétéGénérale

UBS

0 1 2 3 4 5 6 7 8


Nomura

Goldman Sachs

Deutsche Bank

Citi

0 1 2 3 4 5 6 7 8

UBS


Morgan Stanley

Credit Suisse

Citi

Best House, Interest RatesSurvey ranking Editorial ranking


0

5

10

15

20

25

30

DBS Bank Goldman Sachs JPMorgan Morgan Stanley SociétéGénérale

0 1 2 3 4 5 6 7 8


Morgan Stanley

JPMorgan

Goldman Sachs

DBS Bank


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Best House, South Korea

Best House, Hong Kong

Best House, Taiwan

Survey ranking

Survey ranking

Survey ranking

Editorial ranking

Editorial ranking

Editorial ranking


0

5

10

15

20

25

30

Goldman Sachs JPMorgan Nomura Société Générale UBS


0

5

10

15

20

25

30

BNP Paribas JPMorgan Morgan Stanley SociétéGénérale

UBS


0

5

10

15

20

25

30

BNP Paribas Credit Suisse Morgan Stanley SociétéGénérale

UBS

0 1 2 3 4 5 6 7 8

UBS


Nomura

JPMorgan

Goldman Sachs

0 1 2 3 4 5 6 7 8

UBS


Morgan Stanley

JPMorgan

BNP Paribas

0 1 2 3 4 5 6 7 8

UBS


Morgan Stanley

Credit Suisse

BNP Paribas

Turn Data into Intelligence.The Application Programming Interface (API), is a web-based software application which allows clients to access our data in a controlled manner & integrate it using their own software packages & systems.

Retrieve.• Download real time SRP data directly to excel

• Receive market share on each asset class/payoff for each company of interest

Interrogate.• Monitor & increase your market share

• Carry out accurate trend analysis with comprenhensive product data spanning over 15 years in seconds

Incorporate.• Import data directly into in-house systems/platforms

and interrogate the data and risk more effectively

• Combine data sets with other products and visualise it in the context of the larger business

www.StructuredRetailProducts.com/srp-api


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5.0 Distributor Awards

The award for Best Distributor is based on the full sales and performance data per product distributed by the buy-side between February 1 2018 and January 31 2019. Strike date is relevant for best sales and maturity date is relevant for best performance. The results of both are amalgamated to go towards the best distributor award. Sales volume represents total sales invested rather than the notional amount, and performance is the annualised return an investor would have received with a buy-and-hold approach from the strike date until maturity for a product. Each product’s performance is weighted according to its sales volume to give a weighted average performance of the distributor’s portfolio of maturing products for the period.

Top 5 distributors by sales (US$m)

Sales volume & issuanceOutstanding - product issuance & sales volume

Top 5 distributors by weighted-average performance (%)

Best Distributor, Asia Pacific

Total Volumes (USDm) (LHS) Total issues (RHS)

0

10,000

20,000

30,000

40,000

50,000

60,000

0

200,000

400,000

600,000

800,000

1,000,000

2015 2016 2017 2018

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Mirae AssetDaewoo

Securities

KB Investment& Securities

NH Investment & Securities

HSBC Bank First Securities


0

10,00020,00030,000

40,00050,000

60,00070,000

80,00090,000

0

50,000100,000150,000

200,000250,000

300,000350,000

400,000450,000

2015 2016 2017 2018

Mirae AssetDaewoo

Securities


NH Investment & Securities

HSBC BankFirst Securities0

20

40

60

80

100


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Sales volume & issuance


Outstanding - product issuance & sales volume




Best Distributor, Hong Kong

Best Distributor, Japan


0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

0

5,000

10,000

15,000

20,000

25,000

2015 2016 2017 2018


0

500

1,000

1,500

2,000

2,500

3,000

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

2015 2016 2017 2018

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

HSBC Bank Hang SengBank

LeonteqSecurities

EverbrightSun Hung Kai

Bank of China(Hong Kong)

0

1,000

2,000

3,000

4,000

5,000

Mitsubishi UFJ Morgan Stanley

Securities

Tokai TokyoSecurities

OkasanSecurities

SBI Securities Okasan NiigataSecurities


0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

2015 2016 2017 2018


0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

2015 2016 2017 2018

HSBC Bank Hang SengBank

LeonteqSecurities

EverbrightSun Hung Kai

Bank of China(Hong Kong)

01020

30405060

708090

100

Mitsubishi UFJ Morgan Stanley

Securities

Tokai TokyoSecurities

OkasanSecurities

SBI SecuritiesOkasan NiigataSecurities

0

20

40

60

80

100


Introd

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Best Distributor, Taiwan

Best Distributor, South Korea


0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

2015 2016 2017 2018


0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

2015 2016 2017 2018

0

1,000

2,000

3,000

4,000

DBS Bank YuantaCommercial

Bank

BNP Paribas Far EasternSecurities

First Securities

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Mirae AssetDaewoo

Securities


NH Investment& Securities

KoreaInvestment& Securities

MeritzSecurities


0

1,000

2,000

3,000

4,000

5,000

6,000

0

5,000

10,000

15,000

20,000

25,000

2015 2016 2017 2018


0

5,000

10,000

15,000

20,000

25,000

30,000

0

20,000

40,000

60,000

80,000

100,000

120,000

2015 2016 2017 2018

DBS Bank YuantaCommercial

Bank

BNP ParibasFar EasternSecurities

First Securities0

20

40

60

80

100

Mirae AssetDaewoo

Securities




MeritzSecurities

0

20

40

60

80

100


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Best Capital Protected Distributor, Asia Pacific

Best Yield Enhancement Distributor, Asia Pacific


0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

0

100,000

200,000

300,000

400,000

500,000

600,000

2015 2016 2017 2018


0

10,000

20,000

30,000

40,000

50,000

60,000

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

2015 2016 2017 2018

0

1,000

2,000

3,000

4,000

5,000

6,000

Mirae Asset Daewoo

Securities




ShinhanInvestment

0

2,000

4,000

6,000

8,000

10,000

Hana DaetooSecurities

SamsungSecurities

HSBC Bank Mirae AssetDaewoo

Securities



01,0002,0003,0004,0005,0006,0007,0008,0009,00010,000

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

2015 2016 2017 2018


0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

0

50,000

100,000

150,000

200,000

250,000

300,000

2015 2016 2017 2018

Mirae Asset Daewoo

Securities




ShinhanInvestment

0

20

40

60

80

100

Hana DaetooSecurities

SamsungSecurities

HSBC Bank Mirae AssetDaewoo

Securities


0

20

40

60

80

100


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6.0 Shortlists

6.1 Manufacturer Awards

Best House, Asia PacificCredit SuisseJPMorganMorgan StanleyNomuraSociété Générale

Best House, EquitiesCredit SuisseJPMorganMorgan StanleySociété GénéraleUBS

Best House, Asian EquitiesCredit SuisseHSBC BankJPMorganSociété GénéraleUBS

Best House, US EquitiesCredit SuisseGoldman SachsMorgan StanleyNomuraSociété Générale

Best House, Foreign ExchangeBNP ParibasCitiCrédit AgricoleNomuraSociété Générale

Best House, Interest RatesDBS BankGoldman SachsJPMorganMorgan StanleySociété Générale

Best House, CreditCitiDeutsche BankGoldman SachsNomuraSociété Générale

Best House, South & Southeast AsiaCitiCredit SuisseMorgan StanleySociété GénéraleUBS

Best House, South KoreaGoldman SachsJPMorganNomuraSociété GénéraleUBS

Best House, Hong KongBNP ParibasJPMorganMorgan StanleySociété GénéraleUBS

Best House, TaiwanBNP ParibasCredit SuisseNatixisSociété GénéraleUBS

Best House, JapanBNP ParibasDeutsche BankHSBC BankJPMorganSociété Générale

6.2 Distributor Awards

Best Distributor, Asia PacificFirst SecuritiesHSBC BankKB Investment & SecuritiesMirae Asset Daewoo SecuritiesNH Investment & Securities

Best Performance, Asia PacificFar Eastern SecuritiesFirst SecuritiesHSBC BankMaybankOkasan Securities

Best Distributor, South and Southeast AsiaLeonteq SecuritiesMaybankSociété GénéraleUBSUOB

Best Performance, South and Southeast AsiaLeonteq SecuritiesMaybankSociété GénéraleUBSUOB

Best Private Bank, Asia PacificCitiCredit SuisseHSBCJulius BaerUBS

Best Private Bank, South and Southeast AsiaBNP ParibasCitiDBSUBSUOB

Best Capital Protected Distributor, Asia PacificKB Investment & SecuritiesKorea Investment & SecuritiesMirae Asset Daewoo SecuritiesNH Investment & SecuritiesShinhan Investment

Best Yield Enhancement Distributor, Asia PacificHana Daetoo SecuritiesHSBC BankMirae Asset Daewoo SecuritiesNH Investment & SecuritiesSamsung Securities

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6.3 Best Service Providers

6.4 Other Awards

Best Index ProviderHang Seng IndexesKorea ExchangeMSCIS&P Dow JonesSGX (Singapore Exchange)

Best Proprietary Index ProviderDeutsche BankGoldman SachsJPMorganSociété GénéraleUBS

Best Smart Beta Index ProviderHang Seng IndexesMSCIS&P Dow JonesSGX (Singapore Exchange)Stoxx

Best Issuance PlatformContineo FinIQNH Investment & Securities – NhiSelectSG Markets SPUBS - Equity Investor

Best Technology ProviderBloombergFinIQHorizon SoftwareMatlabThomson Reuters

Best Pricing and Risk Analytics ProviderBloombergSIX Financial InformationSunGardSuperDerivativesThomson Reuters

Best Law FirmAllen & OveryClifford ChanceKim & ChangSimmons & SimmonsWong Partnership

Best SP and Derivatives ExchangeHKEXJapan ExchangeKorea ExchangeSingapore Stock ExchangeTaiwan Stock Exchange

Best Warrant ProviderBased on editorial submission

Best Educational InitiativeBased on editorial submission

Best Structured Product Technological SolutionBased on editorial submission

Best Insurance DealBased on editorial submission

Most Innovative IndexBased on editorial submission

Best Wealth ManagerBased on editorial submission

Deal of the YearBased on editorial submission

Personality of the YearWill be announced at the Awards Ceremony


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While on a global scale results for UBS Investment Bank pointed towards an increase in derivatives revenues to the tune of US$154m between 2017 and 2018, market turbulence in Australia and elsewhere

was hard to overlook. Attempts to navigate the adverse conditions underscored the importance of investors’ diverse and unique needs to the overall offering of the Swiss bank, which has won SRP’s ‘Best Distributor, Australia’ award – an accolade that will be presented at SRP’s Asia Pacific Conference 2019, at the Conrad Centennial Hotel in Singapore on April 10.

“2018 was a challenging year for global markets: it was in these conditions that the breath and diversity of the UBS business in Australia came to the fore,” says UBS Derivatives executive director Edward Burns (pictured). “The diversity of the UBS offering was reflected in the volume of secondary and new issuance across all our structures.”

The ongoing US-China trade conflict and the partially successful Abenomics project highlight the apprehensions surrounding the current state of two of the region’s major currencies. Couple that with political uncertainty on a global level, and it is no wonder investors were left scrambling to hold on to any enduring formulas for success.

For UBS, this meant “investors continued to position themselves in yield-based structures across varying maturities,” according to Burns.

“As the year progressed we saw increased risk aversion resulting in the execution of portfolio hedging strategies which enabled investors to navigate the particularly challenging conditions witnessed in Q4,” he says.

To further enable a smooth sailing through the unpredictability at the end of 2018, an “ability to meet specific client requirements through the use of bespoke solutions and tailored strategies” seems to have been key for UBS.

This, however, did not come at the expense of already established structured products series

the bank is known for. One such staple – the UBS Callable Goals series – has seen products linked to shares of large Australian banking institutions and various international shares throughout the years.

New additions to the lineup have so far been made available both in Australian and US dollars, and offered a memory call feature, together with a kick-in option that traditionally puts investors’ capital outside risk for underlying levels above 65%. The highest periodic payment amount available through products in the series in 2019 is 6.8% pa. (UBS Callable Goals 122R - USD).

It was nonetheless hardly a solo act that enabled the bank to salvage value for investors. Burns points out that feedback from the client base at large played a key role in steering a course towards diversity for the bank’s derivatives business – one that ultimately allowed it to maintain a strategic edge in times of market turmoil.

“UBS works with its clients on an ‘outcomes-based’ approach to understand their challenges and investment requirements to create tailored and bespoke solutions for them,” says Burns, adding that UBS’s ability to evolve and differentiate its offering as its clients’ needs develop was a key factor in its success.

“Yield enhancing strategies remain popular in the light of a continued low rate environment with bespoke protection and stock hedging strategies becoming increasingly prevalent as consensus builds that we are approaching late cycle in the equity market.”

Burns says that 2019 will continue to be challenging for investors given the slowing macro environment and unpredictable political backdrop.

“Despite this uncertainty there are opportunities for investors who look beyond traditional structures and strategies,” he says. ”[We expect] a challenging year where, in addition to providing innovative and bespoke solutions, the ability to adapt to market conditions and increase trading flexibility are key.”

UBS: focus on yield-based structures across varying maturities remains


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7.1 Best House and Distributor Overall Winners

7.0 Awards Results

Best House, Asia PacificSociété Générale

Best House, EquitiesJP Morgan

Best House, Asian EquitiesCredit Suisse

Best House, US EquitiesCredit Suisse

Best House, Foreign ExchangeSociété Générale

Best House, Interest RatesGoldman Sachs

Best House, CreditSociété Générale

Best House, South and Southeast AsiaSociété Générale

Best House, South KoreaJP Morgan

Best House, Hong KongSociété Générale

Best House, TaiwanSociété Générale

Best House, JapanJP Morgan

Best Distributor, Asia PacificHSBC Bank

Best Performance, Asia PacificFirst Securities

Best Distributor, South and Southeast AsiaMaybank

Best Performance, South and Southeast AsiaMaybank

Best Private Bank, Asia PacificUBS

Best Private Bank, South and Southeast AsiaDBS

Best Capital Protected Distributor, Asia PacificMirae Asset Daewoo Securities

Best Yield Enhancement Distributor, Asia PacificHSBC Bank

Manufacturer Awards

Distributor Awards


7.2 Best Sales and Performance by Region and Country

Best Index ProviderHang Seng Indexes

Best Smart Beta Index ProviderS&P Dow Jones

Best Issuance PlatformSG Markets SP

Best Technology ProviderBloomberg

Best Pricing and Risk Analytics ProviderBloomberg

Best Law FirmKim & Chang

Best SP and Derivatives ExchangeHKEX

Best Warrant ProviderUBS

Best Educational InitiativeSociété Générale

Best Structured Product Technological SolutionPrivé

Best Insurance DealCredit Suisse

Most Innovative IndexStoxx

Deal of the YearCredit Suisse

Personality of the YearJerome Niddam

Service Providers

Other Awards

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sAustraliaBest Distributor UBSBest Performance Société Générale

South KoreaBest Distributor Mirae Asset Daewoo SecuritiesBest Performance Meritz Securities

JapanBest Distributor Okasan SecuritiesBest Performance Okasan Securities

TaiwanBest Distributor DBS BankBest Performance First Securities

Hong KongBest Distributor HSBC BankBest Performance HSBC Bank

SingaporeBest Distributor MaybankBest Performance Maybank

ThailandBest Distributor Phatra CapitalBest Performance Leonteq Securities


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Jérôme Niddam, head of Asia Pacific at Société Générale, will be given the Personality of the Year Award at SRP’s sixth Asia Pacific Conference – its third out of Singapore –

on April 10 after getting the most votes in the Singapore Awards Survey 2019. In this interview, he tells SRP Asia reporter Jihye Hwang about the bank’s plans to grow and maintain its market share in the region.

Global growth concerns currently weigh heavily on investors’ minds so it’s difficult to find a reason for traditional assets to perform well going forward.

According to Niddam (pictured), this is typically the kind of environment where structured products remain an asset class of choice.

Both European countries and China slowed down last year. The eurozone economy grew more slowly than before (1.8% in 2018, down from 2.4% posted in 2017) while China’s economic growth came in at 6.6% in 2018 – the slowest pace since 1990. Despite tax cuts and a government spending blitz, the US economy also fell short of the Trump administration’s 3% annual growth target last year.

But in spite of this challenging environment, Niddam says that investment opportunities may arise on the back of an extended economic cycle.

“The recent loosening of global monetary conditions by a greater-than-expected margin will help in the short-term,” he says. “Looking ahead towards the summer, we see a genuine possibility that two of the most acute headwinds to financial assets – Brexit and a full-blown trade war between China and the US – will be lifted.”

The head of global markets for Apac added that economists at Société Générale “expect a mild

recession in the US sometime in early 2020,” though economic cycles are inherently difficult to predict as they are influenced by fiscal, monetary and even regulatory policies.

Portfolio diversification and capital preservationGiven uncertain market conditions, the French bank is focusing on late-cycle tweaks on the equity side.

“In the US and Europe, we expect late-cycle dynamics to enforce greater dispersion amongst equities,” Niddam confirms.

The logic behind dispersion trades is picking two baskets of balance sheet names: one with strong names, the other with weak ones. Société Générale has its own screening methodology to rank companies according to the quality of their debt management.

“In rates, we expect curves to steepen and products expressing such a view will add late-cycle diversification to portfolios,” he added.

The rate-linked products are in line with Société Générale’s move last year to pursue portfolio diversification after markets went through the worst year for equities in a decade in 2018.

“SG has successfully diversified its fixed income and mutual fund product range,” said Niddam. “We experienced large demand for interest rate steepening ideas – reverse convertible notes [RCNs] on US dollar constant maturity swap spreads is one example of the great successes achieved by the distribution teams in Asia.”

The RCN structured product essentially bets on the spread of long- and short-term Treasury yields assuming that the rates will not invert. Even if they do invert, the bank does not expect the spread to fall below minus 30 basis points.

Société Générale is also continuing to focus on building capital preservation features into its

Personality of the year Investments in returns-boosting equity and warrant activities have helped grow SG’s market share in Apac


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products as a means to keep jittery investors in the market.

“To anticipate clients’ concerns, SG was one of the first issuers to switch its equity offering to principal protected solutions,” says Niddam.. “We introduced new payoffs with principal protected solutions such as dispersion to take non directional equity exposure, and bearish sharkfins to hedge against market drawdowns.”

Risk recyclingLast year’s equity market slowdown, especially towards the end of 2018, brought back volatility, springing bankers that had been grumbling about markets being too calm into action.

“Twenty-eighteen was a turbulent year,” says Niddam. “The result was a return of volatility and one of the worst Decembers on record for equity markets. This led to a reduction of flows in equity structured products after a strong Q1 as well as a more complex environment for the risk management of structured products.”

Managing structured products in Asia can be difficult with every issuer selling similar products, primarily autocallables. Offloading the risk has become critical for banks in market downturns and some banks found ways to do so by, for instance, selling the risk to hedge funds.

“Critical to the success [on the distribution side] was the ability to intelligently transfer risks – generated by the distribution of blockbuster products – to sophisticated buy-side firms,” says Niddam. “In 2018, SG managed to recycle new types of risk and extended the spectrum of underlyings eligible for alternative risk transfer.”

As a derivative house that buys and sells options with products holding different risk profiles, Société Générale was also able to better manage the risks stemming from the structured products business.

“With an increase in risk recycling thanks to the successful synergies between flow and non-flow activities, SG was able to handle growing volumes and maintain its leadership in key distribution markets – Japan, South Korea and Taiwan,” he said.

Apac franchise extension and focus on ChinaNiddam highlights Société Générale’s increase in market share in Asia Pacific last year in spite of volatile market conditions. He attributes the rise to investments made in its linear equity activities delivering returns as well as growing warrants business.

While maintaining its firm footing for doing such business in countries like South Korea and Japan, Niddam says the bank’s next focus is on China.

“We are investing a lot of resources to become a relevant counterpart to our Chinese clients as well as for global clients who need to access China markets,” says Niddam. “But it’s not just about market share, it’s also about being more relevant to clients.”

Pledging to further evolve product offerings by adapting to the market environment and catering to its clients’ needs, Niddam expresses gratitude to his clients for their support in the past year as well as his team.

“In a year with different market cycles, our capacity to provide them advisory and liquidity even in stressed market conditions, I think, contributed to making us a partner of choice,” says Niddam. “We owe all these successes to our teams,” he says.

Joining Société Générale as an intern in the equity derivatives department marketing team, Jérôme Niddam later worked for the structuring team in New York. He was appointed the head of financial engineering for Japan in 2008, a role in which he developed the bank’s variable annuities business. He then took the role of head of pricing and new products for cross asset solutions in Apac and head of financial engineering, global markets, Apac, before assuming his current role, head of global markets, Apac.

In the past 10 years, Niddam said Société Générale has developed a leading franchise for the region’s institutional clients such as those in Japan, South Korea and Taiwan, while creating an automated distribution platform that allowed the bank to boost volumes and cut transaction time.


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8.0 Appendix Analysis of respondents

Country Number of Respondents

Australia 8

China 2

France 2

Germany 1

Greece 1

Hong Kong 104

India 3

Australia3%

Hong Kong36%

India1%

Singapore23%

South Korea30%

Taiwan3%

Other4%

Country Number of Respondents

Japan 1

Malaysia 1

Singapore 67

South Korea 88

Taiwan 9

United States 1

Vietnam 1

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