Capital protection retains its allure in Switzerland, SSPA

June 16, 2010

Investors continue to buy capital-protected products, but shy away from leverage.

Structured products on the Swiss Scoach exchange remain in recovery, according to figures released from the Swiss Structured Products Association (SSPA). Capital-protected products remain popular, although the volume of leveraged products has decreased, with Deutsche Bank noting a 50% fall in its turnover of these products from April 2010.

In May, the volume of structured products reached Sfr3.77 billion ($3.30 billion), up from Sfr3.68 billion in April 2010. The turnover of leveraged products was down to Sfr2.27 billion in May 2010, from Sfr2.40 billion in April 2010, although there was an increase in the number of leveraged new issues, from 2,478 to 2,562 in the month to May. The total number of listed leveraged products has increased from 20,121 to 20,977 over the past month.

The amount of capital-protected products reduced during May, with the volume now at Sfr190 million, and the 36 new issues of capital-protected products in May is far lower than the 71 issued in April.

Deutsche recorded its lowest levels in market share (measure by turnover) in May 2010 for at least a year, with only 5.51%, a near 50% drop from April 2010. Zurcher Kantonalbank continues to dominate the issuer market space and has increased its turnover of products to 29.18% in May 2010, its highest level since June 2009. Competitor, Vontobel, also saw a marked increase in its May 2010 turnover, to 24.50% from the 22.14% it recorded in April 2010.