A wave of early redemptions on structured equity products has hit Asia, as a result of continuing gains in regional stock markets. "Lots of deals structured since January have already been called and are being rolled over," said Edward Ho, senior managing director at Bear Stearns in Hong Kong, noting products such as callable accruals, accumulators and traditional ELNs on single underlying have been popular. With hedge funds and foreign investors also buying into the region's equity boom, the underlying stock markets look set to stay buoyant and investors whose products have called early will likely be pitched repeat deals.
In addition to structured trades for private banking clients, public retail products have also started being called back as well, noted Min Park, managing director and Asian head of equity risk management at UBS in Hong Kong. For instance, the firm's three-year Super Note Series 9 target-redemption structure was just called back after one year as the target coupon of 11.5% was hit, said Park. The deal was linked to three Hong Kong corporates.
