Societe Generale expects Warrants and CBBCs turnover to increase to HK$4 trillion in 2023
Cross Asset Listed Distribution Sales Directors Eva Tsoi and Horace Chow recently presented the Warrants/CBBCs market review and outlook for this year. Below are a few takeaways from the presentation:
- Both Hang Seng Index warrants and callable bull/bear contracts (CBBCs) turnover to market were increased by 7% and 2.2% year-on year (YoY) respectively. More investors turned to callable bear contracts, primarily those linked to the Hang Seng Index, for directional deployment and hedging.
- Warrants turnover fell 27% while CBBCs turnover dropped 11.5% YoY, which led to an average daily turnover (ADT) of HK$7.85 billion and HK$7.82 billion, respectively.
- Warrants and CBBCs each accounted for 6.3% of Hong Kong’s cash market by ADT in 2022, which fell by 25% YoY.
- US underlying indices had recorded traction in terms of net inflow following the launch of US CBBCs, such demand is expected to increase continuously.
- Hang Seng Index is expected to benefit from the economic recovery and re-opening in mainland China in the first half of 2023.
- Societe Generale also expected a slight increase in the turnover of warrants/ CBBCs, accounting for 11% of the overall market turnover.
- Sectors and themes to watch: new economy stocks featuring ATMX (Alibaba, Tencent, Meituan and Xiaomi), consumption, tourism, Hong Kong real estate stocks, insurance stocks and the Nasdaq 100 Index.
- Risk factors: high inflation, rising interest rates, and low economic growth in the US would last longer than expected.
Click here to read the write-up from Structured Retail Products. (Full article behind paywall only)
In 2022, Societe Generale introduced the US Equity Indices CBBCs on the Hong Kong Stock Exchange which offered investors an even broader spectrum of investment choices to gain exposure to the US market during local trading hours. As a leading issuer in Hong Kong, the Bank will continue to invest in product innovation to offer the most suitable products to its local clients.
For more information, please visit https://hk.warrants.com/en/index/
This article is published by SG Securities (HK) Limited (“SG”). The information contained in this article is provided for reference only and do not constitute an offer, a solicitation of an offer or invitation, advertisement, inducement, representation of any kind or form whatsoever or any advice or recommendation to entered into any transactions. Structured Products are non-collateralised. If the Issuer or the Guarantor is insolvent or defaults, investors may not recover part or all of the amount due. The price of the Structured Products may fall and rise, and under certain circumstances investors may sustain a total loss of their investment. Past performance is not indicative of future performance. CBBCs have a mandatory call feature. CBBCs must be terminated when the price/level of the underlying asset reaches the call price/level before expiry. In such case, you will lose all of your investment in the CBBCs (for category N CBBCs) and the residual values of the CBBCs may be zero (for category R CBBCs). SG and/or its affiliates are the liquidity provider and/or the issuer of the Structured Products referred herein. Under certain circumstance, SG may be the only person quoting prices for the Structured Products on the Hong Kong Exchanges and Clearing Limited. Before investing in the Structured Products, investors should independently evaluate the suitability and risks involved in investing in such products and carefully study all the details of the Structured Products set out in the listing documents. If necessary, investors should seek advice from their professional advisors. Please refer to the relevant listing documents for the relevant indices disclaimers (if applicable). Please visit our website hk.warrants.com to obtain our listing documents in relation to the Structured Products.