HSBC Amanah consolidated its position at the forefront of the Shariah-compliant structured-products market through a series of innovations that responded nimbly to 2024’s market signals.
Early in the year, the bank capitalised on bullish equity sentiment with a non-principal-protected Autocallable Enhanced Participation Structured Investment-i. The payoff lets investors capture the full upside of the reference equity unless an autocall level is triggered, in which case an autocall profit is distributed—an approach that balances upside participation with controlled exit mechanics and marks the bank’s first bespoke equity‐linked Islamic structure to offer both features concurrently.
The inversion of certain currency yield curves prompted a pivot toward shorter-tenor solutions. Six-month principal-protected equity payoffs gained traction among clients who wanted bullish exposure without locking capital for extended periods.
Simultaneously, robust demand for callable features in non-principal-protected trades encouraged the bank to transplant the same mechanism into a principal-protected equity-linked format, widening the palette of risk profiles available to clients amid a high-yield environment.
Currency diversification has also advanced. Persistently low Japanese rates encouraged ring-fenced JPY depositors to seek alternative yield; HSBC Amanah met that appetite by adding yen to its structured-product currency menu, creating a rare Shariah-compliant gateway into Japanese assets.
HSBC Amanah [added] yen to its structured-product currency menu, creating a rare Shariah-compliant gateway into Japanese assets
Sustainability themes were also central to the bank’s strategy. At the tail end of 2023 the bank secured exclusivity on a new MSCI World Islamic ESG Select index with a risk-control overlay, measuring developed-market companies screened for Islamic financial ratios and industry-adjusted ESG scores. Relaunched at intervals through 2024, the index underpinned a suite of equity-linked structures aligned with clients’ demand for renewable-energy and broader ESG exposure.
The bank participated in several innovative transactions in the review period. Notably, it structured a six-month USD principal-protected note linked to Broadcom Inc., offering 100% participation in the average quarterly performance as long as the stock remains within 114% of its initial level on observation dates; should that threshold be breached, investors still receive a 1.00% profit at maturity.
Another landmark mandate, a three-year MYR principal-protected structure tied to a basket of U.S. semiconductor leaders – NVIDIA, Advanced Micro Devices and Taiwan Semiconductor – delivered an auto call profit of 5.30% per annum whenever each share closes at or above its initial level on semi-annual observation dates.
