Viva Las Vega: Japan banks take advantage of volatility play
Last summer, banks in the Japan structured products market were hit hard by moves in volatility – but some banks saw this as an opportunity to recycle risk to European pension funds
May to September last year was a tricky time for firms involved in Japan’s structured product market, after strong success in the early part of 2012 with a rising Nikkei and subsequent increased appetite for equity-linked securities (ELS) autocallables. The story was repeated in Korea, which saw record issuance of ELS in 2012 reaching more than 47 trillion won ($43 billion), according to data provided by the Financial Supervisory Service in Seoul.
The ELS autocallable market enables investors to
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