Singapore's DBS Bank and local-player Taishin International Bank are preparing to enter the nascent onshore credit derivatives market in Taiwan in the coming months. The market was kick-started at the onset of the year with Deutsche Bank, BNP Paribas and Credit Lyonnais receiving the first batch of licenses (DW, 1/26). An official at JPMorgan said he expects the firm to receive the go-ahead in the next two or three months.
"It looks like demand is steadily growing," said Sandeep Gill, head of credit derivatives at DBS in Singapore, noting that the firm is looking to apply for a license for Taiwan-dollar denominated credit derivatives and could be trading within six months. Gill added that DBS has long had a full onshore banking branch in Taipei and currently offers interest rate derivatives.
Catherine Yeh, assistant manager in the treasury department at Taishin International Bank in Taipei, said it expects to receive its license in October and will offer credit-linked notes and deposits to its customer base. "Clients want short-term products with high yields," she added, explaining that typical structured notes in Taiwan are usually offered with maturities of five to 10 years. The bank will look to offer credit-linked instruments with one or two year maturities ranging from USD5 million and up on local corporate names.
