USING STRUCTURED SOLUTIONS FOR FOREIGN INVESTMENTS

Transcription

1 USING STRUCTURED SOLUTIONS FOR FOREIGN INVESTMENTS PRESENTED BY XAVIER BURKHARDT EXECUTIVE DIRECTOR

2 2 LEONTEQ THE PLATFORM DEDICATED TO STRUCTURED INVESTMENT SOLUTIONS QUANTITY >26,000 structured products issued p.a., based on FY 2017 results >CHF 26 billion turnover in Investment Solutions and Banking Solutions 10 banking platform partners and 2 insurance platform partners 3 million customized pricings p.a., based on FY 2016 results CLIENTS >1,000 LOCATIONS 11 EMPLOYEES ~450 NATIONALITIES 44 MARKET CAP CHF 0.96bn 1 FOUNDED 2007 QUALITY One of the largest issuers of structured products with a market share of c. 10% #1 market-maker and Top Service Award in Switzerland in 2012, 2013, 2014, 2015, 2016, 2017 and 2018 Core tier 1 ratio of 19.6%, based on FY 2017 results OUR PLATFORM PARTNERS Raiffeisen EFG International Standard Chartered Bank Aargauische Kantonalbank Crédit Agricole CIB Deutsche Bank J.P. Morgan Bank of Montreal Cornèr Bank PostFinance Helvetia Die Mobiliar 1 as of 14 May 2018

3 3 LEONTEQ BUSINESS LINES PRODUCTS & SERVICES Investment Solutions Manufacture investment products using own and partners balance sheets. Mainly distributed through Leonteq s salesforce. Banking Solutions Provide a scalable platform to banking partners to enable manufacturing of investment products on their own balance sheet. Mainly distributed through the partners salesforce. Pension Solutions Provide a scalable life insurance policy platform to Life Insurers enabling them to reduce capital costs, centralise processing, admin & reporting. Distributed through the life insurer only.

4 4 LEONTEQ HOW WE DIFFERENTIATE OURSELVES Cutting-edge platform Leonteq combines a fully automated and integrated proprietary technology platform designed for flexibility, innovation and transparency with an international team of specialists. Vertical Integration Leonteq s service offering is vertically integrated, covering the entire value chain, and can be tailored to specific client needs. The automation of key processes helps to mitigate operational risks and to enhance client service. Cost Leadership Very high levels of automation lead to competitive cost per issued product, as well as allowing for small ticket sizes. Independence Leonteq is listed on the SIX Swiss Exchange and operates from 11 offices across Europe and Asia. Our independence enables agility, whilst allowing further pursuit of our Platform Partners strategy.

5 5 INVESTMENT SOLUTIONS GREATER EFFICIENCY IMPROVING PRODUCT SERVICES A high degree of automation allows Leonteq to offer highly tailored products with small ticket sizes Cost of production substantially below industry average Degree of automation Multi issuer brokerage platforms Retail- and private banks Investment banks Decreasing ticket size as automation increases 10x more efficient STP = COST EFFICIENCY Source: Leonteq estimates 1 Source: McKinsey expert estimates 2 Selection of three top European issuers Value chain Automated platform 1 hours Manual platform 1 hours Pricing Confirmation Term sheet creation Settlement Other Total Peer comparison 2 Average cost per new product, thousands CHF Top tier bank average 2 Leonteq 6-76% 10x 76% faster 1 cheaper 25

6 6 INVESTMENT SOLUTIONS STRUCTURED INVESTMENT PRODUCTS Market expectation of investor Offered solutions Components Rising volatility Rising markets/ underlying Sharp falling markets/ underlying possible Capital Protection Most common types: Capital Protection with Participation ZERO BOND CALL OPTION SIP Sideways/slightly rising markets/ underlyings Falling volatility Yield Enhancement Most common types: Barrier Reverse Convertible, Autocallables ZERO BOND PUT OPTION SIP Rising markets Participation Most common types: Bonus Out-performance Certificate CALL OPTION ZERO BOND PUT OPTION SIP

7 ILLUSTRATIONS LOOKBACK TRACKER INVERSE FIXED COUPON NOTE PROBATION AUTOCALL 7

8 8 LOOKBACK TRACKER INVESTMENT VIEW Long-term bullish but expect near-term volatility to provide good entry level. TERMS OF TRADE SX5E INDEX PAYOFF Can be financed with funding & Dividends Currency Lookback Period 12 months USD 3 months Profit Payoff Final Fixing Lookback Strike Initial Fixing Loss Product

9 9 LOOKBACK TRACKER SCENARIO Can be financed with funding & Dividends 130% Lookback Period 90% Redemption = 140% Redemption = 95% 85% 80% Lookback Period

10 10 INVERSE FIXED COUPON NOTE INVESTMENT VIEW Market is toppish. Outlook is at best neutral. Investors do not see significant upside from here. TERMS OF TRADE ALPHABET INC-CL A (GOOGL UQ Equity) APPLE INC (AAPL UQ Equity) FACEBOOK INC-A (FB UQ Equity) Profit PAYOFF Currency Autocall Obs. Autocall Trigger Level 1 year USD Monthly % of the initial fixing at 145% 200% Type Strike Level Guaranteed 10.06% p.a % of the initial fixing 0 Best Performing % of the initial fixing Loss Product Barrier Type EUROPEAN (observed at maturity)

11 11 INVERSE FIXED COUPON NOTE SCENARIO 1 The best performing underlying closes below the autocall level. Note is early redeemed, investor will get Principal + SCENARIO 1 + UNDERLYING 1 UNDERLYING 2 UNDERLYING 3

12 12 INVERSE FIXED COUPON NOTE SCENARIO 2 At maturity, best underlying closes below the barrier level. Barrier is not breached» Redemption: Principal + SCENARIO 2 145% + UNDERLYING 1 UNDERLYING 2 UNDERLYING 3

13 INVERSE FIXED COUPON NOTE SCENARIO 3 At maturity, best underlying closes at or above the barrier level. Barrier is breached» Redemption: 50% Principal + SCENARIO 3 150% 145% 50% + UNDERLYING 1 UNDERLYING 2 UNDERLYING 3 13

14 14 PROBATION AUTOCALL INVESTMENT VIEW Short-term moderately sanguine. Not expecting significant downside but long-term uncertain. An alternative to the Autocallable with European Barrier, with an additional protection Currency Autocall Obs. TERMS OF TRADE ALPHABET INC-CL A (GOOGL UQ Equity) APPLE INC (AAPL UQ Equity) FACEBOOK INC-A (FB UQ Equity) 1 year USD Quarterly Profit at 80% PAYOFF Autocall Trigger Level Type % of the initial fixing Guaranteed Strike at 8.50% p.a. Strike Level % of the initial fixing 80.00% of the initial fixing Loss Worst Performing Product Barrier Type EUROPEAN (observed at maturity) Gearing = 1/Strike Probation 80.00% of the initial fixing Probation Period 3 months (Daily on Close observation)

15 15 PROBATION AUTOCALL SCENARIO 1 On any autocall observation date, if the worst performing underlying closes above the autocall trigger level at, the product early redeems» Redemption: Principal +. An alternative to the Autocallable with European Barrier, with an additional protection SCENARIO 1 80% Probation European + UNDERLYING 1 UNDERLYING 2 UNDERLYING 3

16 16 PROBATION AUTOCALL SCENARIO 2 If the worst performing underlying never trades below the probation barrier level during the probation period, the capital is guaranteed at maturity, if not previously early redeemed. An alternative to the Autocallable with European Barrier, with an additional protection SCENARIO 2 80% Probation + UNDERLYING 1 UNDERLYING 2 UNDERLYING 3

17 PROBATION AUTOCALL SCENARIO 3 The worst performing underlying trades below the probation barrier level during the probation period, and closes below the barrier at maturity» Loss. An alternative to the Autocallable with European Barrier, with an additional protection SCENARIO 3 80% 70% Probation European 70% + UNDERLYING 1 UNDERLYING 2 UNDERLYING 3 17

18 18 THANK YOU!

19 19 LEGAL DISCLAIMER This document is prepared by Leonteq Securities (Singapore) Pte. Ltd.. This document and the information included herein are for general information purposes only, and have not been authorised or endorsed by any of the product issuers or partners referred herein. The information contained herein may be subject to change without notice. Leonteq Securities (Singapore) Pte. Ltd., its affiliates, and their respective employees or agents, and the product issuers or partners referred herein, make no representation or warranty, express or implied, as to the completeness or accuracy of the information in this document and accepts no liability for the information, and any assumptions, statements or opinions, contained herein. Leonteq Securities AG ( Leonteq ) does not carry on any activity of dealing in any securities in Singapore, and will only deal with investors in any investment product through, inter alia, (i) the holder of a capital markets services licence to deal in securities; (ii) a bank licensed under the Banking Act (Cap. 19 of Singapore); (iii) a merchant bank approved as a financial institution under the Monetary Authority of Singapore Act (Cap. 186 of Singapore), with whom Leonteq has distribution arrangements with (each, a Distributor ). Any questions or interest that an investor may have in respect of the investment product or information set out herein must be directed to the Distributor. Leonteq Securities (Singapore) Pte. Ltd. (CMS ) (Address: #36-03/04 Asia Square Tower 1, 8 Marina View, Singapore , Telephone , Facsimile ) ( Leonteq Singapore ) is responsible for the distribution of this publication in Singapore. It is licensed and regulated by the Monetary Authority of Singapore for dealing in securities. The services and products it provides are available only for or in relation to institutional investors and accredited investors which are corporations, each as defined in Section 4A of the Securities and Futures Act (Cap. 289 of Singapore)( SFA ). Any including only partial reproduction of any article or picture is solely permitted based on an authorization from Leonteq Singapore. No responsibility is as sumed in case of unsolicited delivery. Leonteq Securities (Singapore) Pte. Ltd.. All rights reserved.