Sales of China’s snowball notes fall
Issuers point to tighter equity index basis and recent regulator warning over marketing of snowballs
Sales of popular Chinese derivative products known as snowballs are slowing, with issuers blaming a shrinking equity index futures basis for eating into the jumbo coupons on offer not too long ago. Closer regulatory scrutiny of snowball distributors is also said to have dampened issuance.
The annualised difference between the spot value of China’s CSI 500 index and the price of the most active futures contract referencing the index narrowed from 13.16% on September 6 to 8.72% on November 4
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