Announces 2015 Share and Quality Leaders Research Shows Slowdown in Electronic Trading Volume

On the strength of strong gains in market share, BMO Capital Markets has closed the previously precipitous gap between it and the perennial market leader, RBC Capital Markets.

A new report, BMO Shares the Spotlight with RBC, released today by Greenwich Associates shows the two firms are locked atop the market in a statistical dead heat with market shares in overall fixed income of 14.7% to 15.8%. TD Securities and Scotiabank are next, tied with market shares of 11.5% to 11.8%, followed by National Bank Financial and CIBC, which are statistically deadlocked with market shares of 7.6% to 8.7%. These firms are the 2015 Greenwich Share Leaders in Overall Canadian Fixed Income.

BMO Capital Markets’ impressive gains have come mainly in rates products. In credit products, RBC Capital Markets has maintained its dominant position, followed by TD Securities. “In terms of market penetration, or the share of Canadian institutional investors using each firm as a dealer in fixed income, the trio of RBC Capital Markets, BMO Capital Markets and TD Securities is starting to separate itself from the pack,” says Greenwich Associates consultant Peter Kane.

When it comes to quality, RBC Capital Markets is still king.  RBC Capital Markets is a 2015 Greenwich Quality Leader in all three categories of Fixed-Income Sales, Trading and Research. As in market share, BMO Capital Markets made significant advances in quality ratings over the past year and earns a spot as a 2015 Greenwich Quality Leader in Fixed-Income Research. “Also notable for its improvements in quality over the past 12 months is TD Securities,” says Peter Kane.

Electronic Trading
Fixed-income dealers that had been winning market share from the Canadian majors on the basis of strong e-trading performances saw that momentum stall over the last year. This is due to:

  1. A renewed commitment from the majors to e-trading overall, winning back previously lost market share.
  1. E-trading activity slowed over the 12-month period—and overall volumes have possibly declined from the previous year.

“The plateau in e-trading volumes is almost certainly temporary and likely attributable to the general slowdown in trading volumes in Canadian government bonds among hedge funds and other particularly active institutional traders,” says Peter Kane.