China stock slump hits snowball issuers
Sharp selloff in CSI 500 index threatens pain for local issuers of popular structured products
Securities houses in China could see profits on structured products known as snowballs wiped out because of China’s recent stock slump and the shrinking of an equity index futures basis used to generate large coupons.
China’s CSI 500 index has lost nearly 19% since the beginning of the year – with 13% of that coming since the beginning of March – amid concerns about weakening economic fundamentals and the conflict in Ukraine. Dealers say the selloff means snowballs tied to the index are less
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