The Dutch pension asset manager's Asia Pacific head of real estate says his team has just had one of its busiest years ever and that 2021 is looking similarly promising.
The so-called Zero Certs will be listed on Hong Kong's stock exchange and offer exposure to stock indices in Japan, Korea, Malaysia and Thailand, as well as on Nasdaq in the US. There is also a warrant linked to the price of gold.
The certificates are, in effect, cash-settled call warrants with an exercise price near zero. In other words, the buyer ends up with an exposure that is very similar to having a long position in the underlying index, but which he can trade in Hong Kong dollars on the local exchange.
This gives zero-strike warrants a very different character to regular index warrants. "The beauty of Zero Certs is that it is a very simple and transparent product," says Matthew Wong, ABN Amro's head of private investor products for Asia.
Because the exercise price is zero, the buyer gets a non-leveraged exposure û HK$1,000 of Zero Certs buys HK$1,000 of exposure, with one-for-one participation in the underlying index. As a result, investors do not have to worry about the technical factors û implied volatility and time decay û that warrant gamblers need to understand.
ABN Amro launched Zero Certs in Singapore last June and now has 20 market access and thematic certificates trading on the exchange there, including warrants on the bank's climate change and environment index and its luxury index. Both products could be added to the mix in Hong Kong, according to the bank.
The Zero Cert mature in 2010 and the minimum investment requirement is about HK$30,000 for the index certificates and HK$3,000 for gold.
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Mega players Nippon Life and Dai-ichi Life are looking for opportunities in higher-yield single-A US corporate bonds, which offer more appealing yields than stagnant domestic offerings.