Third quarter 2019 turnover with CHF 94 bn clearly above previous year’s level
In the third quarter of 2019, turnover of Swiss structured products recorded by the largest SSPA members significantly exceeds the previous year’s level. The industry achieved turnover of CHF 94 billion in the third quarter of 2019, CHF 18 billion or 24% higher than in the prior-year quarter. Turnover in the first nine months amounted to CHF 267 billion, 7% higher than in the same period last year. Almost half of total turnover (44%) was generated by yield enhancement products. Nominal turnover of participation products more than doubled compared with the same quarter of the previous year, accounting for 28% of sales at CHF 26 billion. The turnover share of leverage products now amounts to 17% and capital protection products account for 11% of quarterly turnover. More than half of all product turnover (58%) is based on equities, 23% on foreign exchange. The most important currencies for structured products are USD, EUR and CHF, accounting for 90% of total sales.
Zurich, 7 November 2019. Structured product value creation statistics drawn up by Boston Consulting Group take account of stock market listed as well as unlisted products created in or for Switzerland that are sold nationally as well as internationally. SSPA members Banque Cantonale Vaudoise, Barclays Capital, Commerzbank, Credit Suisse, Goldman Sachs, Julius Baer, Leonteq, Raiffeisen Schweiz, UBS, Vontobel as well as Zürcher Kantonalbank took part in the survey for the third quarter of 2019. These represent the largest part of the Swiss market.
Most important developments in the third quarter of 2019:
- Total turnover in Q3 2019 is CHF 18 bn higher than in the prior-year quarter; growth rate compared to Q3 2018 was 24%. Turnover growth of the first nine months of 2019 amounted to 7% compared to the prior-year period.
- At 44%, yield enhancement products hold the largest share of total turnover in Q3 2019 (CHF 41 bn). Total turnover for participation products more than doubled to CHF 26 bn in Q3 2019 compared to last year and turnover share reached 28% (prior year: 17%). Participation products constituted the second-largest product group in Q3 2019. The turnover share of leverage products decreased from 21% in Q3 2018 to 17% in Q3 2019, representing a nominal turnover of CHF 16 bn. Reaching CHF 10 bn turnover, capital protection products made up 11% of total turnover in Q3 2019.
- With 58%, Equity products constituted the largest portion of total turnover in Q3 2019, with nominal turnover increasing by 38% to CHF 55 bn compared to last year. Compared to Q3 2018, the turnover share of Foreign Exchange products fell from 27% to 23% in Q3 2019. The turnover share of Fixed Income products declined in Q3 2019 to 11% (prior year: 15%).
- The turnover of non-listed products was stable compared to Q3 2018 and reached again CHF 55 bn; the turnover share declined from 67% in Q3 2018 to 55%. Meanwhile, seeing strong growth of 70%, the nominal turnover of listed products reached CHF 42 bn compared to CHF 25 bn in Q3 2018.
- Turnover on the primary market reached the same level of CHF 44 bn compared to prior-year quarter but its share fell by 12 percentage points to 47%. Secondary market turnover increased from CHF 31 bn in Q3 2018 to CHF 49 bn in Q3 2019, reaching a turnover share of 53%.
- USD is again the predominant currency in Q3 2019 with a share of 37%, decreasing by one percentage point compared to previous year. The share of EUR increased by 3 percentage points compared to Q3 2018 to reach 35%, CHF also gained share and reached 18%.
SSPA chairman Markus Pfister comments: “In the third quarter, yield enhancement products in particular were again used to generate returns in low-interest phases and to further optimise the investment portfolio. Structured products also offer interesting investment opportunities in this environment.”
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