Eusipa optimistic that fall in structured products sales across Europe is a 'temporary blip'

A good start to 2013 means fall in turnover for structured investments and leverage products across six European exchanges in Q4 2012 does not spell bad news, says Eusipa

Thomas Wulf, Eusipa

The latest figures from the European Structured Investment Products Association (Eusipa) reveal that turnover from certificates and leverage products trading on six European stock exchanges fell by 21.9% to €20.7 billion ($27.5 billion) in the fourth quarter of 2012 compared to the same period in 2011. This included a fall of 13.4% from the previous quarter.

However, Thomas Wulf, Brussels-based secretary-general of Eusipa, says the outlook for the structured investment market has been looking more positive since the start of 2013.

"We think it's just a temporary blip. We have seen a slight upsurge in the first month of this year – December was not a good month, but January has been pretty good," says Wulf.

Positive signs include the fact that the total number of listed products at the end of December 2012 was higher than a year previously, rising 7.4% for investment products and 15.3% for leveraged products.

"Leveraged products react much more quickly than investment products," says Wulf. "When there is a new story in the markets – in whatever industry – it always shows up first in the leveraged products market, then investment products pick it up after a slight delay. So there are many underlyings being pushed into leveraged products."

We think it's just a temporary blip. We have seen a slight upsurge in the first month of this year

The appetite for leveraged products may be increasing because investors are becoming more willing to take on risk, but "we need to wait to see what the real trend is with the results for the first quarter of 2013," adds Wulf.

The biggest rise in turnover for an investment product was that for the Associazione Italiana Certificati e Prodotti di Investimento in Italy, where turnover almost doubled (rising by 96.9%) in the final quarter of 2012 relative to a year earlier. Turnover for leveraged products did not see such big increases – France saw the most, with a 9.3% rise year on year and a 6% rise between the third and fourth quarters of 2012.

Eusipa compiled the statistics using data from the stock exchanges of its six member countries: Austria, France, Germany, Italy, Sweden and Switzerland.