2014 Share and Quality Leaders in Asian (Ex- JANZ) and Australian/New Zealand Fixed Income
Many global banks have pulled out or scaled back coverage of Asian local currency bonds, leaving these fast-growing markets largely in the hands of a few committed global banks like HSBC and Standard Chartered Bank and up-and-coming domestic firms.
Going forward, most global banks will rely on their prowess in developed-market rates and G3-denominated Asian product to secure their dominant positions in Asian fixed income.
Domestic Currency Reversal
In the past two years, many global banks shifted gears and reduced their coverage of local currency markets to focus on rates and credit products in hard currencies, creating opportunities for dealers that remain committed to local markets business to win new market share.
Among the global banks, the prime beneficiaries are HSBC, which leads all dealers with a 12.8% market share in domestic currency Asian bonds, and Standard Chartered, which leapfrogged other global banks last year to capture the second spot with an expanding market share of 8.2%.
“From the dealers’ perspective, maintaining a franchise in domestic currency Asian bonds is a very expensive and very capital-intensive proposition,” says Greenwich Associates consultant Abhi Shroff. “Given new capital reserve requirements and balance sheet pressures, dealers with sizable investments and strong capabilities will find themselves facing much less competition from their global rivals.”
Of course, global banks do face real competition in these markets from domestic banks such as KDB Daewoo Securities and Woori Investment & Securities in South Korea, ICBC, Bank of China and CITIC Securities in China, ICICI Securities and Axis Bank in India, and CIMB and Maybank in Malaysia.
2014 Greenwich Share Leaders
HSBC leads all fixed-income dealers in Asia with a commanding market share of 11.0% (Ex- JANZ). Citi ranks second with a market share of 8.8%, followed by Deutsche Bank at 7.4%, Standard Chartered at 6.8% and J.P. Morgan and Barclays, which are tied with markets shares of 5.6-5.8%. These firms are the 2014 Greenwich Share Leaders in Overall Asian Fixed Income.
The 2014 Greenwich Share Leaders in Overall Australian/New Zealand Fixed Income are Deutsche Bank and Citi, which tie for the top spot, followed by ANZ Bank, National Australia Bank and Westpac, which are also tied in market share.
2014 Greenwich Quality Leaders
HSBC claims the title of 2014 Greenwich Quality Leader in Asian-Fixed Income Sales. In Asian Fixed-Income Research HSBC is joined as 2014 Greenwich Quality Leader by Nomura Securities. The 2014 Greenwich Quality Leaders in Asian Fixed-Income Trading are Bank of America Merrill Lynch, Citi, Deutsche Bank and HSBC.
The 2014 Greenwich Quality Leaders in Australian/New Zealand Fixed-Income Sales are ANZ Bank and Westpac. The 2014 Greenwich Quality Leaders in Australian/New Zealand Fixed-Income Research are Commonwealth Bank of Australia, Deutsche Bank and Westpac. In Australia/New Zealand Fixed-Income Trading the 2014 Greenwich Quality Leaders are ANZ Bank, Citi and Deutsche Bank.