Equity houses are gearing up to structure equity-linked deposits for Chinese banks as part of the continued development of the mainland market. UBS has co-structured what it believes is the first equity-linked deposit in China, referenced to the Dow Jones Industrial Average, and it also provided the OTC hedge. The other counterparty in the deal could not be determined by press time. "I am positive on the overall opportunity of the structured deposit market in mainland China," said Min Park, managing director and head of Asian equity risk management at UBS in Hong Kong.
The products are being structured for U.S. dollar-based deposits and sold via onshore banks. China watchers said the move is a natural progression of investment products in the market, following dollar-based interest rate and fx-linked deposits which kicked off last year. "We're taking a look at this," said an equity head at a rival firm in Hong Kong, adding, "As markets go, it's still the early days in China and there's still great potential."
