Commodity-linked structured products overall slowed down in 2015 as industrial metals and agricultural products slid in the past year along with energy prices. Commerzbank was able to respond quickly through its strong commodities structured product platform, providing tailored solutions to private banks in an accurate manner.“Even as the global structured products industry slowed down this year, resulting in some of our competitors’ exit, we doubled our efforts in streamlining our operations so as to position ourselves favourably for the next cycle. We continue to build new client relationships whilst making sure that existing clients receive the the best service we can provide,” says Jingkai Peng, head of commodities, Asia at Commerzbank.
Popular commodity-linked structured products for private banks this year continue to be the Twin-Win and Step Down Autocall products. With oil prices teetering below the US$50 mark per barrel earlier this year, oil has been the most popular underlier. “At such low strikes, oil prices must fall further to decade-lows in order for the downside barrier to be triggered, thus investors find it an attractive proposition,” Peng explains.
In the face of volatility in the equities markets in August, investors have lost confidence in the growth of Asia, especially China. However, Peng mentions that selected commodities as underliers have performed well. “Tumultuous markets also brings opportunities and we provided timely price updates to clients whenever volatility levels spiked in structures where the client is selling volatility so that they capitalise on the opportunities for higher yields. We also provide quality research to our clients to help them better understand the prevailing key factors affecting commodity prices,” he says.
Continuing to work on new and innovative ideas and solutions to meet clients’ needs, Commerzbank has placed client service and value-added offerings at the heart of its operations and therefore was voted as 2015’s Best Provider of Commodity-linked Structured Products.