About June 2007

This page contains an archive of all entries posted to Structured Notes in the June 2007 category. They are listed from oldest to newest.

May 2007 is the previous category.

July 2007 is the next category.

Many more can be found on the main index page or by looking through the archives.

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June 2007 Archives

June 22, 2007

Spiders in the path

True to form, the naming strategy in the Structured Products market is at the cutting edge of marketing. No sooner had every poster on every bus and every bus stop (in London, at least) lauded the new Spiderman film, than we found - from a quick dip into wikipedia - that S&P was there first.

Ratings agencies are notoriously reactive by nature, but the SP specialists at S&P are doing their bit to change that perception. And what a good job they have, and thank the lord for acronyms.

From the distinctly unpromising start of SPDRs, or Standard & Poor's Depositary Receipts, we have the brief relief of reading that the acronym translates into Spiders. And the Spiderman association is surely no accident, as the wikipedia entry points out: "Spiders are run by State Street" is surely a line from the film. The only uncertainty is whether there is, in fact, a Spiders 1, Spiders 2, and a Spiders 3. Peter Parker should be told.

June 18, 2007

Structured Smorgasbord

Soaring temperatures are the excuse for many things, Structured Products included, says NDF. But even before we could get to the success of the company’s latest product offerings on a press release issued at the end of last week, we were waylaid by an extraordinary array of food-based references that had us on our knees, praying for a new sub-editor – for they are the ones that provide the headlines that often hurt the most. Before we had got past the first 10 words of the press release, we were entertained by the opportunities of “sizzling offers”, and the company’s hopes to “curry” favour with intermediaries over the summer. Weakened not only by the thought of all of this food, and then again by the puns from these gents, we were then told that the April Growth Kick Out Plan was the “toast of the industry”. And after that came the details, which were a mere snack in relation to the many courses we had already consumed. Keep it simple and we will read further; baffle us with cod culinary promises and we may not, but thanks for trying.

Structured Procrastination

An introduction to Structured Products inevitably requires a few days, hours or even weeks in front of a series of definitions that you no sooner learn than become outdated, or so it seems. Part of the investigation also requires at least some attempt to address the internet with a request for anything that matches the term either Structured, or Products, or preferably both. As the electronic search goes on, the best delivery of last week must be the blog/thought page that specifically addressed the word Structured, but only in relation to the practise of Structured Procrastination. A ridiculous thought, and of little use to any investigation of Structured Products, but amusing all the same. But if there is anybody out there who thinks they can produce an index on the basis of procrastination, then we would be delighted to know.

June 11, 2007

Flock for safety

An interesting article in The Telegraph from June 8...Apparently Morgan Stanley reckons UK shares are over-priced (and I'm sure they are not alone). So what should an investor do?

It was nice to see the article (which can be read here) pointed out the benefits of guaranteed equity bonds (GEBs) which suit those "people who find the sort of stock market volatility seen this week simply too upsetting to tolerate".

Sadly, as the article points out, however, National Savings & Investments, one of the largest GEB providers has no current offers. Is it time NS&I and others re-evaluated their GEB offerings?

If you are a UK provider I'd be interested to hear your thoughts...

June 8, 2007

The M&A impact

Rumours are circulating about a potential tie up between structured products stalwarts SG CIB and BNP Paribas. Other buzz regards a tie up between Unicredit and SG CIB. And who could ignore the ongoing battle to buy ABN Amro?

But what does this all mean for the structured products markets? Any merger (whether it be of equals or of one dominant and one smaller institution) carries execution risk. It usually takes a while for the wrinkles to be ironed out. And in such scenarios clients inevitably suffer.

Going forward, however, once a merger has run its course, clients often benefit from economies of scale (although that's providing the merging institutions have streamlined their business lines effectively). Just imagine the structured products prowess of a combined BNP/SG, a BarCap/ABN or RBS/ABN.

Will the ties up be a good thing for the structured products distributor? Will there be synergies between the investment bank's structured products desks? Or will the rumoured mergers have no impact?

As always, if you have any thoughts, do let me know...

June 6, 2007

SPA makes its thoughts known

The Structured Products Association (SPA) has posted its comments about the Retail Structured Products (RSP) draft principles document that circulated last month. The RSP principles were drafted by five associations, namely, the International Swaps and Derivatives Association (Isda), the European Securitisation Forum, the International Capital Market Association, the London Investment Banking Association and the Securities Industry and Financial Markets Association.

Impressively, the SPA comments are as long as the original principles. The draft was designed by the five associations to focus on how "structured products combine various components (which) may in practice result in different parties being responsible for different aspects of the related regulatory obligations." The principles therefore "focus on how to address this issue, given that all parties have a common interest in customers obtaining satisfaction with regards to their legitimate expectations as to performance of the investment."

The SPA says it broadly agrees with the RSP draft but maintains that “in order to be comprehensive, the RSP principles should acknowledge the differences in market dynamics and regulation in various markets.”

The comments make for interesting reading and can be accessed here.

If you have any thoughts of the SPA comments, or indeed the RSP draft, do let me know…