Société Générale Corporate & Investment Banking
European markets were major beneficiaries of a global equity rally that drove bullish flow product sales at Asia’s private banks this year, such as autocallable fixed coupon notes (FCN), share accumulators and bonus enhanced notes (BEN) for added upside. Further, Asian HNWIs showed increased demand for European underliers, especially as higher valuations in other markets spurred diversification.
“With Trump becoming US president at the beginning of the year, the US market has been going up non-stop and Asia markets have followed, yet volatility has been dropping to historical lows,” says Jung-Jin Yoon, head of private banking cross-asset distribution for Asia at Societe Generale, highlighting better opportunities from European blue chip volatility.
According to Yoon, clients showed interest in major names that have an Asia presence due to greater familiarity, particularly in the banking, insurance, oil and automobile sectors.
“Investors are craving yield and, again, the European markets offer the widest selection of blue chip names with a relatively decent level of volatility,” Yoon adds. “Also, as a lot of client portfolios have high concentrations in the US and Asian markets, there was a need to diversify from the record high markets.”
Despite traditional biases against European markets, favourable market conditions and the effective capitalisation on client needs were instrumental to the success of structured products invested in European equities. Asia’s private banking industry responded, picking Societe General Corporate & Investment Banking as 2017’s Best Provider – Europe Equity-linked Structured Products.