Thursday, December 8, 2016 Stamford, CT USA — A partial retreat in Asia by several global fixed - income dealers—including some with historically prominent Asian franchises—is the result of hard decisions banks have been forced to make about how and where to allocate capital. In fact, even as certain banks from Europe, the United States and Australia retrench in Asia, others are stepping in to fill the void. 

A new report from Greenwich Associates shows that in the short term, the primary result of these strategic shifts has been that the market’s strongest dealers have gotten stronger. Over the past year, growing amounts of trading volume have been concentrated in the hands of the market’s four leading dealers. 

At the very top of the market, Citi has continued to win market share and now stands tied for first with HSBC as the 2016 Greenwich Share Leaders in Overall Asian Fixed Income (ex-JANZ).  Both banks also lead in service quality and are the 2016 Greenwich Quality Leaders in Overall Asian Fixed-Income Service.  Citi also ranks first as the Greenwich Share Leader in Overall Asian ex-Japan Fixed Income.

Behind this group of market leaders, several dealers from Europe and the U.S.  are expanding their footprints in Asia. J.P. Morgan has always been effective at exporting Asian debt to U.S. and European investors, but recently has made significant gains among Asia-domiciled clients. Goldman Sachs is winning relationships and market share in G3 Bonds, U.S. investment-grade bonds and developed-market rates products. BNP Paribas has asserted itself in swaps trading. Wells Fargo has established a growing presence selling U.S. Treasury bonds and investment-grade credit products to Asian investors.

“The strategies of these dealers show they still see Asian fixed income as having potential,” says Greenwich Associates Vice President Parijat Banerjee.  “These are smart banks that don’t follow the herd, and they are committing new resources into an Asian market that they still see as a prime driver of future growth and an important piece to being a global franchise.”

Australia and New Zealand
Although ANZ Bank has scaled back its pan-Asian ambitions for now, the bank remains dominant in its home market of Australia/New Zealand.  ANZ Bank has built a commanding lead over the competition in terms of overall market share and is the top-ranked 2016 Greenwich Leader in Overall Australian/New Zealand Fixed-Income Market Share. 

ANZ Bank and Westpac Banking Corp. are the 2016 Greenwich Quality Leaders in Fixed-Income Sales, and Citi and Commonwealth Bank of Australia claim the title in Fixed-Income Research.