List of 2015 Share and Quality Leaders Shows Fierce Competition For Trading Share Among Asian Equity Brokers

The opening of China’s stock markets to offshore investors has increased the importance of China and Hong Kong to both brokers and investors in Asian equities.

Commissions on trades of Chinese/Hong Kong equities made up 54% of the total commissions paid by institutional investors to brokers on trades of Asian equities for the 12 months ended Q3 2015 — up from 46% for the same period in 2014. China A-shares saw the largest net gain, increasing from 10 to 15% of spend, while Hong Kong still dominates at 39%.

“The launch of Stock Connect, which linked the Shanghai Stock Exchange to the Hong Kong Stock Exchange in later 2014, facilitated the flow of offshore investment capital into domestic China shares and triggered explosive growth in equity trading activity in Hong Kong and China,” says Greenwich Associates consultant John Feng.

This growth, and the potential for continued expansion of institutional investment and trading activity in Chinese equities, has increased the importance of the already critical Hong Kong and China markets to Asian equity brokers.

“Given that these markets now represent nearly half of all institutional commission payments in Asian equities, any broker looking to establish a meaningful presence here must deliver strong coverage in these two markets,” says Greenwich Associates consultant Jay Bennett. “Every one of the 2015 Greenwich Leaders in Asian Equities offers robust execution capabilities in Hong Kong and China and strong research platforms in Hong Kong and, to a lesser extent, Chinese equities.”

The list of 2015 Greenwich Share Leaders in Asian Equity trading and Research/Advisory Services reveals a highly competitive market featuring a tightly grouped collection of brokers fighting hard for every percentage point of market share. Bank of America Merrill Lynch leads in Asian Equity Trading with a share of 9.5%, followed by UBS, Morgan Stanley and Credit Suisse, which are statistically tied with shares of 8.5%–8.8%, and CLSA Asia-Pacific Markets and Citi, which are tied at 7.5%–7.8%. The 2015 Greenwich Quality Leaders in Asian Equity Sales Trading & Execution Service are Bank of America Merrill Lynch, Morgan Stanley and UBS.

Credit Suisse tops the list of 2015 Greenwich Share Leaders in Asian Equity Research/Advisory Services with an advisory vote share of 9.1%, followed by Bank of America Merrill Lynch and Morgan Stanley, which are tied at 8.3%–8.6%, CLSA Asia-Pacific Markets at 7.9%, and the trio of UBS, Citi and Deutsche Bank, which are tied at 6.4%–6.6%. The 2015 Greenwich Quality Leaders in Asian Equity Research Product & Analyst Service are Bank of America Merrill Lynch, Credit Suisse and Morgan Stanley.

Equity Derivatives
Institutional trading volumes in Asian Equity Options and Volatility Products are driven by two factors: pricing and the quality of broker sales relationship. Largely on the basis of those two factors, approximately three-quarters of institutions active in these products use Morgan Stanley as an important broker, followed by Goldman Sachs, Bank of America Merrill Lynch and UBS, which are statistically tied with market penetration scores of 56%–62%, and Deutsche Bank, BNP Paribas and Citi, which are tied at 41%–47%. These firms are the 2015 Greenwich Share Leaders in Asian Options & Volatility Product Coverage.