Emilio Sainz de Baranda: "2014 will be a clear-cut year for equities" December 13, 2013
Emilio Sainz de Baranda: "2014 will be a clear-cut year for equities"
Emilio Sainz de Baranda, Head of Equity Derivatives Sales, analyzes the key points that will govern the derivatives equity markets over the next year and BBVA's strategy to enhance its position as a total solutions provider.
Q: In which equity markets is BBVA more focused?
BBVA's equity derivatives platform is currently focused on Europe. We have seen that most of Europe's markets are recovering their equity structured products business activity. Peripheral countries have achieved strong comebacks from their very low levels of 2012.
Q: How would you describe the distribution of Equity Derivatives Sales during 2013?
BBVA's performance in EQD went beyond our expectations in 2013, With massive inflows from US and European investors into European equities, and in particular into peripheral countries, with Italian and Spanish underlyings clearly leading this trend and with great potential.
Q: How has 2013 been for the different assets that you work with?
Equity markets have seen an upwards trend more evident in the second part of the year. Although 2013 has been again a more fixed income-biased year, we expect that 2014 will be a clear-cut year for equities.
Q: In your opinion, which areas are going to grow in the near future?
We see a growing interest from clients for smart indices, like low volatility indices, and other sectorial indices (with the investment strategy already embedded in the index), are perceived by our clients as more transparent and less sell-side dependent. We will endeavour to support them with this new class of underlyings. In fact, BBVA has developed the methodology for the new Ibex35 Target Volatility stock index family, launched by Bolsas y Mercados Españoles (BME). The new indices are designed to limit the Ibex35's risk to predetermined levels, through an automatic volatility-adjustment mechanism. This mechanism aims to optimise the benchmark's exposure, allowing it to adapt to the target volatility desired by investors.
Q: Which are BBVA's working plans for 2014?
We can summarise them in two words – BBVA Notes. During 2013, we have worked hard to have a new client-centric structured notes platform compliant with the European Prospectus Directive (PD) and now we are ready to offer our clients an excellent product. Moreover, We strongly believe that BBVA is nowadays one of the best "value-for-money" banks in Europe. Not only because we are one of the favourite stocks for many analysts around Europe, and we have a Tier one capital above 11%, but also because we have a very good diversified income, covering both emerging markets and developed countries.
Q: And in terms of geographic growth?
We are working to continue growing in three geographies: Mexico, USA and LatAm.
Firstly, we want to keep expanding our coverage in Mexico and we have just hired a new salesperson based in Mexico. Even though BBVA Bancomer is the number one counterparty in the country, we believe we are in an excellent position to increase our market share. Secondly, we will increase our focus in the USA in 2014 from the platform that BBVA Compass provides us in Houston. And finally South America, where we will export all the knowledge acquired in Europe and in Mexico to offer our LatAm institutional clients a product from a bank they know and they can trust.