Structured Products Awards for Excellence 2017 – Best Provider of Interest Rate-linked Structured Products

Société Générale Corporate & Investment Banking

Jung-Jin Yoon
Head of Global Market Sales, Cross-Asset B2B & Distribution Hong Kong & Korea
Société Générale Corporate & Investment Banking

In 2017, global central banks’ monetary policies continued to diverge as the increasingly multilateral economic and political environment sent rates in varying directions and speeds. Although central banks, for most part, did little to surprise markets, rate divergence created opportunities for structured product investors to capitalise on market dislocations.

“2017 is a year we have seen the presence of many structures and [underliers] as investors play catch up with the decisions from various central banks,” comments Jung-Jin Yoon, head of private banking cross-asset distribution for Asia at Societe Generale. “Increasingly divergent global rates clearly bring opportunities and risks as a good product today may not be as attractive after one month. We work very closely with the product distributors across Asia to ensure that we come up with products and ideas that are in line with their views and investors’ comfort levels at that point in time.”

Societe Generale observed early demand for reverse convertible USD CMS 10-year notes in anticipation of a USD rate rise. But as the rate curve flattened, investors took a view that that the curve would be steeper than implied going forward, investing in 3-5-year principal redemption
steepener trades and reverse convertibles on CMS spread. Towards the end of the first quarter, GBP CMS rate stole the spotlight and investors started trading reverse convertible GBP SMC 10-year notes with the anticipation of a BoE rate hike.

The French investment bank also successfully capitalised on clients’ increased focus on rising rates, effectively driving the adoption of new reference assets and maturity lengths.

“Investors are increasingly trading products that benefit from the rise in rates – reverse convertibles being the popular product in this category,” Yoon says. “In addition, investors looking to deploy money into longer tenor products are investing into floating rate notes to minimise the impact of a rise in rates. We believe in having the right mix in both short and medium tenor products to benefit from the rising yields in rates.”

The bank’s proposition extends beyond just a diverse range of payoffs and rate-related reference assets. It continues to enhance its platform to meet the ever-changing needs of the industry, to improve execution efficiency, pay-off range and user-friendliness.

A breadth and depth of offering, coupled with a robust client-centric platform, led Asia’s private banking industry to choose Societe Generale Corporate & Investment Banking as 2017’s Best Provider of Interest Rate-linked Structured Products.