Bank of China International is preparing to launch equity-linked notes to Hong Kong retail clients this summer, following its recent structured product offerings. Warren Kwan, head of equity derivatives in Hong Kong, said BOCI will likely issue in July capital guaranteed notes with embedded barrier options. The products are part of the Flexibond program that the bank kick-started at the onset of the year with an exchangeable bond that incorporates credit-default risk.
"There's still appetite for equity risk," said Kwan, noting that although regional equities have slumped in recent weeks this has not deterred retail investors. Furthermore, as the product will likely be short-dated, potentially with a one-year maturity, it should differ from the majority of capital guaranteed structures in Hong Kong, which typically have maturities of five-to-10 years.
