Lean liquidity

Investor demand for yield-enhanced fixed-income investments in Taiwan has forced dealers to offer longer-dated range-accrual structures. But an uneven competitive landscape and lean liquidity is making life tough for some. Toby Garrod reports


Pressure is mounting in the Taiwanese markets for new exotic products that can hold local money in local pockets. And range-accrual notes, as the current structured product of choice for Taiwan's trust funds, hold significant potential to curb the outflow of cash abroad over the coming year.

Range-accrual notes are useful when investors believe that an underlying - typically interest rates - will remain in a certain range during a pre-specified period of time. Each coupon is based on the number

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