markets

Morgan Stanley, BofA Lead in Asia Equity Trading: Greenwich

Updated on
  • Deadlocked pair followed by Citigroup, Credit Suisse
  • Looming impact of MiFID II may make 2018 ‘a messy year’

Morgan Stanley and Bank of America Merrill Lynch tied at the top of a ranking of last year’s Asian equity trading share, as a surge in market valuations and a rebound in activity boosted brokerages in the region, according to Greenwich Associates.

Citigroup Inc. and Credit Suisse Group AG tied in third place, while Citic Securities Co. unit CLSA Ltd. and UBS Group AG were in fifth spot, according to a report by the U.S. consulting firm.

Credit Suisse dropped from a year earlier, when it shared a three-way tie for first place with Bank of America and Morgan Stanley. Citigroup placed in equal fourth position with CLSA and UBS in the earlier year.

Asian Equity Trading Share for 2017

BrokerStatistical Rank
Morgan Stanley1=
Bank of America Merrill Lynch1=
Citigroup3=
Credit Suisse3=
CLSA Asia-Pacific Markets5=
UBS5=

Source: Greenwich Associates

Soaring stock markets and increased volume boosted trading revenue in 2017, though the EU regulations known as MiFID II “could make 2018 a messy year,” according to the Greenwich report. The revised Markets in Financial Instruments Directive, which came into force on Jan. 3, requires investment firms to pay separately for client services they receive from banks and brokerages, rather than bundling them with trading commissions.

“As the number of asset managers planning to absorb research costs internally grows, so does the downside risk for their external research spend and for firms that have historically depended on it for a significant portion of their revenues,” Greenwich Associates consultant Parijat Banerjee said in a statement.

Greenwich based its 2017 Asian equities report on interviews between July and September 2017 with 256 Asian equity fund managers and analysts, 111 trading desks at money managers and 43 users of equity-derivative products at institutions in Asia.

Algorithmic Trading

The report ranks Bank of America Merrill Lynch top in Asian equity algorithmic trading share last year, with Credit Suisse and Morgan Stanley tied in second, and UBS and Citigroup level in fourth.

It’s widely assumed that MiFID II will accelerate the spread of electronic trading, though the effect has not yet materialized in Asia, according to Greenwich.

(Earlier versions of this story were corrected to properly reflect earlier year’s rankings in the third paragraph and algorithmic trading information in penultimate paragraph.)

(Adds electronic trading volumes detail in final paragraph.)
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