DBS to Launch OTC Bitcoin & Ethereum Cryptocurrency Options Trading & Structured Notes for Institutional Investors & Accredited Investors of DBS Private Bank & DBS Treasures Private Client
18th September 2024 | Hong Kong
DBS has announced the launch of OTC (Over-the-Counter) Bitcoin & Ethereum cryptocurrency options trading & structured notes for eligible institutional investors and accredited investors of DBS Private Bank & DBS Treasures Private Client. DBS (17/9/24): “DBS today announced it will launch over-the-counter cryptocurrency options trading and structured notes for eligible institutional investors and accredited wealth clients. It is the first Asian-headquartered bank to offer financial products whose value is linked to the price of Bitcoin and Ethereum – the two largest cryptocurrencies by market capitalisation. Currently, clients build their digital asset portfolios with DBS by trading cryptocurrencies and security tokens via DBS Digital Exchange (DDEx). From Q4 2024 onwards, eligible clients seeking to build exposure to the asset class may do so through options trading and structured notes. Depending on the product’s structure and cryptocurrency price movements, clients may earn yield on fiat or take delivery of the underlying cryptocurrency. Eligible clients custodising Bitcoin and Ethereum with DBS may also hedge their positions against market volatility and potentially earn yield through various options structures. For instance, a client seeking to manage the inherent volatility of Bitcoin may buy a put option, which gives the client the right to sell Bitcoin at a fixed price at a future date, even if Bitcoin prices fall below the fixed price by that future date … … The launch of these products comes against an approximately 50% growth in the market capitalisation of cryptocurrencies in the first five months of 2024. During this same period, DDEx reported that the value of digital assets traded on the exchange nearly tripled in Singapore dollar terms as compared to the same time in 2023. In addition, the number of active trading clients on DDEx grew 36%, while digital assets custodised with DBS surged over 80% in Singapore-dollar terms. DDEx’s growth was driven by a net inflow of deposits from new and existing clients seeking safe-haven bank-grade platforms to custodise and trade digital assets. DBS adopts the industry best practice of custodising its clients’ digital assets within the bank using institutional-grade cold wallets, separate from DDEx. Cryptocurrency options trading and structured notes will only be available to eligible institutional clients and accredited clients of DBS Private Bank and DBS Treasures Private Client. In 2024 July, DBS launched a 3-year fixed-income portfolio (DBS CIO Target Maturity Fund 2027) managed by world’s largest asset manager BlackRock ($10 trillion AUM), with the fund investing in 50 high-conviction investment grade corporate bonds & low-risk government bonds. The minimum investment is from SGD / USD 1,000, and the fund structure was created under Singapore Variable Capital Company (VCC).
“ DBS to Launch OTC Bitcoin & Ethereum Cryptocurrency Options Trading & Structured Notes for Institutional Investors & Accredited Investors of DBS Private Bank & DBS Treasures Private Client “
Jacky Tai, Group Head of Trading and Structuring, Global Financial Markets, DBS: “Professional investors are increasingly allocating to digital assets in their portfolios. Underpinned by DBS’ strong credit ratings and longstanding expertise in structuring solutions, these financial products are an expansion of the bank’s value proposition to provide clients trusted institutional-grade access to the digital asset ecosystem. Now, our clients have an alternative channel to build exposure to the asset class and incorporate advanced investment strategies to better manage their digital asset portfolios.”
Important – Clients intending to trade in financial products with cryptocurrencies as underlying assets are reminded of the risks associated with such products and should carefully assess their investment objectives, risk appetite, financial situation and particular needs before making any investment decision.
DBS Launches 3-Year Fixed-Income Portfolio DBS CIO Target Maturity Fund 2027 Managed by BlackRock, Fund Invests in 50 High-conviction Investment Grade Corporate Bonds & Low-risk Government Bonds, Minimum Investment from SGD / USD 1,000, Fund Structure Created under Singapore Variable Capital Company
27th July 2024 – DBS has launched a 3-year fixed-income portfolio (DBS CIO Target Maturity Fund 2027) managed by world’s largest asset manager BlackRock ($10 trillion AUM), with the fund investing in 50 high-conviction investment grade corporate bonds & low-risk government bonds. The minimum investment is from SGD / USD 1,000, and the fund structure was created under Singapore Variable Capital Company (VCC). DBS (24/7/24): “DBS/POSB customers can now invest in the new, exclusive DBS CIO Target Maturity Fund 2027 (the ‘Fund’), a globally-diversified, high-quality bond portfolio made up of more than 50 high-conviction investment grade corporate bonds and low-risk government bonds. Managed by BlackRock, investors stand to benefit from stable, liquid, and resilient income pay-outs, which will allow them to achieve their financial goals with a greater peace of mind when held to maturity. With no allocation to the riskier high yield sector, emerging markets or securitised assets, the Fund is designed potentially to offer higher total returns than cashor money market funds over a three-year period. More importantly, it allows clients, including retail investors, to invest in a globally-diversified basket of high-quality bonds affordably with a minimum SGD/ USD 1,000 lump sum investment. By focusing on bonds that mature in 2027, the Fund seeks to provide steady, regular payouts while maintaining a high-quality portfolio that is also able to mitigate reinvestment risk. It presents an attractive alternative for clients who are currently staying in cash or money market funds, given that cash yields typically drop when the yield curve normalises, and when the US Federal Reserve (Fed) starts to cut interest rates. The Fund represents the latest example of DBS Bank leveraging Singapore’s Variable Capital Company (VCC) structure to issue and manage new and innovative fund offerings to clients, following last year’s launch of the DBS Multi Family Office Foundry VCC. The flexibility and considered advantages of the VCC structure has allowed the bank to rapidly develop and offer a diverse range of investment solutions to clients in response to highly time-sensitive market demands. The Fund leverages BlackRock’s extensive expertise in credit research, credit selection, portfolio construction, and portfolio management, with underlying bonds handpicked through a rigorous credit selection process. The Fund’s Initial Offer Period spans 15 July 2024 to 12 August 2024, with an option to extend for two weeks until 26 August 2024. Investors pay an annual management fee of up to 0.6% p.a. to access a professionally managed bond portfolio that is optimised to maximise returns with a minimum SGD/ USD 1,000 lump sum investment. To find out more and invest in the DBS CIO Target Maturity Fund 2027, please visit this page or see attached for the prospectus and product highlight sheet.”
Hou Wey Fook, Chief Investment Officer, DBS Bank: “Investors should be mindful to not take on systematic risks that are specific to individual industries or firm. This principle also extends to bond investments, which present attractive opportunities for investors today. Over the years, I’ve seen multiple clients, including some ultra-high net worth clients, unknowingly buy and hold single bonds in their portfolios. It is wise to invest into bond funds, like our new DBS CIO Target Maturity Fund 2027, instead because they offer similar returns to single line bonds, but without investors having to take on unnecessary concentration risk in the case of a default. It ultimately gives our customers more security and peace of mind as an investment component of a well-diversified financial plan.”
Dennis Quah, Head of Singapore Wealth at BlackRock: “Amid the fast-changing investment landscape with potential rate cuts, investors are looking to have a high-quality and diversified portfolio while enjoying a higher income. The tailored portfolio underscores BlackRock global investment team’s capability in robust credit selection and prudent investment management. We are delighted to collaborate with DBS and will continue to help investors in Singapore access investment opportunities in the global bond market to achieve their financial goals.”
About DBS – DBS is a leading financial services group in Asia with a presence in 19 markets. Headquartered and listed in Singapore, DBS is in the three key Asian axes of growth: Greater China, Southeast Asia and South Asia. The bank’s “AA-” and “Aa1” credit ratings are among the highest in the world. Recognised for its global leadership, DBS has been named “World’s Best Bank” by Global Finance, “World’s Best Bank” by Euromoney and “Global Bank of the Year” by The Banker. The bank is at the forefront of leveraging digital technology to shape the future of banking, having been named “World’s Best Digital Bank” by Euromoney and the world’s “Most Innovative in Digital Banking” by The Banker. In addition, DBS has been accorded the “Safest Bank in Asia“ award by Global Finance for 15 consecutive years from 2009 to 2023. DBS provides a full range of services in consumer, SME and corporate banking. As a bank born and bred in Asia, DBS understands the intricacies of doing business in the region’s most dynamic markets. DBS is committed to building lasting relationships with customers, as it banks the Asian way. Through the DBS Foundation, the bank creates impact beyond banking by supporting businesses for impact: enterprises with a double bottom-line of profit and social and/or environmental impact. DBS Foundation also gives back to society in various ways, including equipping underserved communities with future-ready skills and helping them to build food resilience. With its extensive network of operations in Asia and emphasis on engaging and empowering its staff, DBS presents exciting career opportunities.
About BlackRock – BlackRock’s purpose is to help more and more people experience financial well-being. As a fiduciary to investors and a leading provider of financial technology, we help millions of people build savings that serve them throughout their lives by making investing easier and more affordable.
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