Wider Yuan Band to Spur Range-Accrual Demand, DBS’s Ong Says

March 7 (Bloomberg) -- Allowing China’s yuan to move in a wider range will bolster demand for range-accrual structured notes linked to the currency as volatility increases, according to DBS Group Holdings.

* The yuan slid as much as 0.9% on Feb. 28, its biggest

intraday loss, on speculation the PBOC would widen the

currency’s trading band before the annual NPC which started

this week; the currency later advanced to the most in almost

two years on March 5, the first day of the legislative

meeting * “The implied volatility has begun to go up, which allows

structurers to structure something in a wider range,” said

Tommy Ong, the head of wealth management solutions, treasury

and markets at DBS Bank (Hong Kong) Ltd. * This year, range accrual notes, which accumulate returns for

each day that the reference index is within a pre-determined

range, will become more popular than those which make one- way bets on the currency, he said

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