Daiwa SMBC is considering structuring notes on emerging market currencies as clients are becoming more comfortable looking overseas for yield. A senior manager in Tokyo said the firm is looking at offering products on such currencies as the Mexican peso and South African rand, following the success of Australian and New Zealand dollar-linked products. These have been popular in the last few years due to the relatively higher interest rates in such countries.
"Investors want more alternatives to straight bonds," said the manager, noting while interest rates are starting to rise in Japan, higher yields persist overseas. He continued the firm is studying various option-linked structures, potentially for launch by the end of the year, but said it was too early to elaborate.
