The Vienna Stock Exchange (Wiener Brse) has launched a new market segment for structured products.
“The change in the market segmentation was motivated by the growing interest in structured products, especially in certificates,” says a spokeswoman for Erste Bank in Vienna.
In the past two-and-a-half years, the number of traded certificates on Wiener Brse has risen from almost 50 to just over 450. Essentially, certificates are debt securities issued by banks, similar to bonds. Unlike bonds, investors abjure interest in favour of capital appreciation.
Certificates give investors the right to share in the development of the value of the underlying investment – shares, indices or a commodity or currency. Depending on the terms of issue, Wiener Brse differentiates between investment certificates, bonus certificates, discount certificates, leverage certificates and other certificates.
“It is possible to find an investment product for every desired risk and for every market scenario,” says Alfred-Michael Spiss, Member of the Board of Raiffeisen Centrobank AG. “Raiffeisen Centrobank is currently the only Austrian investment bank that covers the entire universe of certificates.”
Spiss views certificates as good entry opportunity into the capital market. “Certificates are less expensive, simple, have flexible denominations and thus enable investing with small amounts,” he says.
“The new segment is the logical continuation of a customer-oriented market segmentation of Wiener Brse,” explains Stefan Zapotocky, Member of the Board of Wiener Brse AG. “The introduction of the new segment helps to cut transaction costs and gives issuers an official exchange listing. By year-end, the number of traded certificates should increase to 600.”
On the EUWAX, the largest warrants and certificates exchange in Europe, the number of listed certificates is over 50,000 and monthly trading volumes hit over Euros 2.6 billion in March, for example. In Germany as well, the certificates segment is steadily gaining market shares and posting net inflows.