Bank of China International is preparing to launch a range accrual structured note in the competitive Hong Kong retail market, which it believes will be a first. "Range accruals have been popular for private placements but this is new in the retail market," said Mark Chan, head of equity derivative sales at BOCI in Hong Kong.
BOCI is preparing to launch a daily range accrual structure on three local blue-chip stocks, likely with a two-year maturity and a quarterly coupon. It is targeting a range of plus/minus 8% of the initial spot levels of the shares, for which the investor will receive an enhanced coupon. "Now it appears the direction of the market is uncertain and it seems like a good opportunity to launch a product on stable shares," noted Chan. The product, named Flexibond #10, will be finalized and issued in the next few weeks.
