Increase of value creation of 20% in Q3 2017 relative to the previous year – consistently high demand for yield enhancement products
Turnover for Swiss structured products amounted to CHF 64.7 billion in Q3 2017. Value creation of the major SSPA members increased with 20% significantly compared with prior-year quarter. Over the first nine month of 2017, growth amounted to 17% compared with respective time period of 2016. Demand for yield enhancement products remained strong, accounting for about 57% of the total. 48% of all products are equity-based, followed by foreign exchange decreasing from 46% to 34% compared to prior year. An increase however can be observed in turnover in the fixed income segment with a market share of 13%. Non-listed products constitute about 71% of the turnover.
Zurich, 27 October 2017. Structured product value creation statistics drawn up by the Boston Consulting Group take account of listed as well as unlisted products created in or for Switzerland that are sold nationally as well as internationally. SSPA members Barclays Capital, Banque Cantonale Vaudoise, Credit Suisse, Commerzbank, Goldman Sachs, Julius Baer, Leonteq, Notenstein La Roche, UBS, Vontobel as well as Zurich Cantonal Bank took part in the survey for the third quarter of 2017. They represent a majority of the Swiss market.
Important insights (Q3 2017):
- At around CHF 64.7 billion, in year-on-year terms total quarterly turnover for Q3 2017 was with 20% significantly above the figure for the prior-year quarter.
- Product group shares shifted compared to previous year: Once again, yield-optimisation products accounted for the lion’s share at 57%. Leverage products constitute again the second largest portion and remain at 16%. Capital protection products made up 14% in Q3 2017, a relative growth of 254% with respect to prior-year quarter. After reaching bottom in Q2 2016 with 3.1%, market share steadily grew since. Compared to Q2 2017, growth slowed down to 13%. Participation products accounted for 12% of total turnover in Q3 2017. Although leverage products constituted only 16% of total turnover, they again represented the vast majority (87%) of transactions.
- Foreign exchange and equities remain the most frequently used underlying assets. Equity products represent the largest portion of total turnover, growing from 42% to 48% since Q3 2016. Compared to prior year, the share of foreign exchange products decreased from 46% to 34%. The share of fixed income products grew by 132% compared to Q3 2016 to now 13%.
- Non-listed products constitute about 71% of the turnover. Even though the primary market represented a stable and larger share of turnover (65%), the secondary market again comprised around 96% of all transactions in Q3 2017.
- With a total share of 89%, USD, EUR and CHF are still by far the major currencies used: USD grew by 13 percentage points and is the predominant currency in Q3 2017 with a share of 48% (prior year: 35%). The share of EUR is decreasing to 24% and CHF remains stable at 16%.
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