Marked by a flurry of surprises, including an untraditional market response to BoJ policies, speculation over US rate normalisation and a tumbling GBP due to Brexit, 2016 has proven to be an eventful year. But, as with any event, those who are enterprising found opportunity.
“Markets have been choppy and volatile,” says Edward Lee, Société Générale’s head of cross-asset solutions sales for private banks in Hong Kong and Singapore. “But high implied volatility created attractive yield pick-up for clients by selling volatility for classic private banking payoffs.”
According to Lee, turbulent markets have rendered Asian clients keen on target redemption and pivot target redemption structures, which allow investors to benefit from the upside until the profit target is met, unlike forward accumulators with an absolute barrier.
The bank attributes its success, evidenced by it winning Best Provider of FX-linked Structured Products, to its readiness for “any eventuality” to ensure consistent and seamless services. This is all the more critical in times of severe volatility, a scenario which will undoubtedly persist following Trump’s election win, which could redraw the trading lines of the global economy.
“With the expected market events and high volatility, we plan ahead and make provisions to ensure seamless coverage,” he says. “This makes us a reliable service provider.”