KBC Financial Products started lobbying the Stock Exchange of Hong Kong last week about listing capital guaranteed notes--structured with over-the-counter derivatives--on the exchange, according to Sajeev Sirpal, managing director and head of Asia in Hong Kong. A typical capital guaranteed note will consist of a combination of a zero-coupon bond and a structured over-the-counter call funded by the interest on the note.
"Capital guaranteed products have proved popular over the last year," said Sirpal. He attributes this to the falling equity market and low interest environment. "By listing them on the exchange it will allow players without retail banking distribution to offer the products," Sirpal said. It will offer the products within six months if it receives permission.
"I'd like to see this happen," said a head of equity derivatives at a European firm in Hong Kong. Lorraine Chan, spokeswoman for the exchange in Hong Kong, did not return calls.
