Chunilal added that the introduction of step-up and stock settlement features had made a large contribution towards encouraging European institutional involvement in the capital securities market, and that he was expecting stock settlement to be applied across a broader range of European jurisdictions in 2001.
"The UK is the only market where we have seen hard or soft stock settlement transactions in Europe," said Chunilal, "but more countries will approve stock settlement and therefore help expand the issuer base."
Diversification of credit types will be another feature of the market in 2001, said Chunilal, who pointed to recent hybrid issuance from the Mexican banking sector as an illustration of the trend.
"We are seeing the universe of issuers and credit types continuing to expand as investor acceptance of the instrument continues," he said. Hybrid issuance by a Singaporean entity might provide a further example of how the issuer base is broadening in the near future, he added.
Chunilal said direct issue structures - as pioneered by Barclays Capital through reserve capital instruments (RCIs) - will be used more widely in 2001. "Merrill Lynch is doing a lot of work on direct issue structures," he said. "Only Sweden, Finland and the UK have approved these structures, but the country universe for direct issuance will expand."