Structured interest-rate products for the retail market have been taking off in Korea as clients are pulling back from equity-linked deals. "Some banks thought these products would be too difficult for clients to understand, but the box has been opened and it's selling well," said a senior marketer at a European house in Seoul.
With volatility slumping and many customers believing the Korean equity market is nearing a peak after rallying more than 50% last year, interest-rate products such as constant-maturity swap option structures and range accruals have been gaining momentum. The marketer estimated over USD300 million in structured retail rate products have been sold so far this year. "Equity investors have been getting nervous and these products are a good alternative," he added.
