Second quarter 2020 with slight turnover increase to CHF 87 bn also due to market opportunities arising from the corona crisis
Total turnover of CHF 87 bn in Q2 2020 was CHF 4 bn higher than in the prior-year quarter (CHF 82 bn); growth rate compared to Q2 2019 was 5%. Over the first half-year 2020, after record turnover in March and a subsequent flattening, total turnover increased by 18% year-on-year and reached CHF 204 bn. Almost half of total turnover in Q2 2020 (45%) was generated by yield enhancement products. Nominal turnover of leverage products increased compared with the same quarter of the previous year and, at 28%, represent the second-highest share of total turnover. The share of turnover of capital protection products now amounts to around 16% and the one of participation products to 11%. Equity remains the dominant asset class (50%), while the shares of Foreign Exchange (26%) and Fixed Income (13%) are declining or stay stable respectively. The nominal turnover on the primary market declined compared to Q2 2019 and reached CHF 45 bn (prior year: CHF 51 bn). Turnover on the secondary market grew by CHF 10 bn to CHF 41 bn compared to prior-year quarter, its share increased by 10 percentage points to 48%. The most important currencies for structured products are USD, EUR and CHF, with a total share of 89% of turnover.
Zurich, 29 July 2020: Structured product value creation statistics drawn up by Boston Consulting Group take account of listed as well as unlisted products created in Switzerland that are sold nationally as well as internationally. The SSPA members Banque Cantonale Vaudoise, Barclays Capital, , Credit Suisse, Goldman Sachs, Julius Baer, Leonteq, Raiffeisen Switzerland, Societe Generale, UBS, Vontobel and Zürcher Kantonalbank took part in the survey for the second quarter of 2020. They represent the majority of the Swiss market.
Main developments in the second quarter of 2020:
- Total turnover of CHF 87 bn in Q2 2020 was CHF 4 bn higher than in the prior-year quarter (CHF 82 bn); growth rate compared to Q2 2019 was 5%. Over the first half-year 2020, total turnover increased by 18% year-on-year and reached CHF 204 bn.
- In Q2 2020 yield enhancement products represented 45% of total turnover (CHF 39 bn), a decrease by 8 percentage points compared to Q2 2019. Leverage products increased their turnover to CHF 24 bn (prior year: CHF 15 bn), and constituted the second-largest group with a turnover share of 28% (prior year: 18%). Turnover share of capital protection products increased from 13% in Q2 2019 to 16%, the nominal turnover reached CHF 14 bn (prior year: CHF 11 bn). Reaching CHF 9 bn turnover, capital protection products made up 11% of total turnover in Q2 2020, a decrease by 4 percentage points compared to the prior-year quarter.
- Similar to prior year, equity products represented with 50% the largest turnover share in Q2 2020 and reached a nominal turnover of CHF 43 bn. The nominal turnover of foreign exchange products decreased from CHF 24 bn in Q2 2019 to CHF 22 bn in Q2 2020, and the turnover share fell from 29% to 26%. Fixed income products reached a nominal turnover of CHF 11 bn in Q2 2020, the turnover share remained unchanged at 13% compared to prior-year quarter.
- Reaching CHF 58 bn, non-listed products constituted 66% of the total turnover in Q2 2020 resulting in a decrease by 2 percentage points compared to Q2 2019. The nominal turnover of listed products increased compared to prior-year quarter from CHF 26 bn to CHF 29 bn.
- The nominal turnover on the primary market declined compared to Q2 2019 and reached CHF 45 bn (prior year: CHF 51 bn). Investors are actively looking at and taking advantage of market opportunities, resulting in a nominal increase in secondary market turnover by CHF 10 bn to CHF 41 bn compared to prior-year quarter, its share increased by 10% to 48%.
- EUR was the predominant currency in Q2 2020 with a share of 39%, gaining 5% compared to prior-year quarter. The share of USD decreased by 2 percentage points to 37% compared to Q2 2019, CHF also lost share and reached 11% (prior year: 15%).
SSPA Chairman Markus Pfister commented: “We saw in the second quarter, after extraordinary market turbulences and distortions in the first quarter, a stabilizing element regarding volatility and volumes in structured products. Investors use the flexible products, especially in the leverage segment, to quickly take advantage of market opportunities. Investors were intensively engaged in market opportunities, as can be seen from the increased volumes on the secondary market. The industry has coped well with the stress test of COVID-19.”
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