Deutsche Bank has begun selling what it believes to be the first credit derivatives products in the onshore Malaysian market. The firm has structured two or three over-the-counter credit-linked notes in recent weeks for local clients. A market official in Kuala Lumpur said that as local investors have started to use fixed-income instruments, primarily bonds, and are now becoming open to the idea of alternative products, adding "they are beginning to open up their eyes". The notes are structured on Malaysian triple A rated names.
As this is a new product for the Malaysian market, many investors are not up to speed on the benefits of credit derivatives, noted the official in Kuala Lumpur. Deutsche Bank will hold seminars for potential investors to educate them about the product in the coming months. He added the firm will target local banks, insurance companies and funds.
