Thursday, November 29, 2018 Stamford, CT USA — Banks from around the world continue to invest in the Asian fixed-income market, despite a lull in trading activity that made it tough to make money in 2018, and with an eye toward the fast-growing Chinese bond market. 
For the fifth consecutive year, Citi ranks as the market leader in Overall Asian (ex-Japan) Fixed-Income Market Share. HSBC is ranked No. 2 followed by a statistical tie for third among J.P. Morgan, UBS and Deutsche Bank.

HSBC holds the top spot in Overall Asian (ex-JANZ) Fixed-Income Market Share followed closely by Citi. J.P. Morgan is ranked third followed by Standard Chartered Bank, Deutsche Bank, and Bank of America Merrill Lynch statically tied for fourth.  

Over the past 12 months there has been continued expansion from a group of global banks that lack the pan-Asian reach of a Citi or an HSBC, but nevertheless are committed to the market and are gaining share in their target products and countries. “This group includes banks like Barclays and UBS that view Asian credit as an important center of growth,” says Greenwich Associates Managing Director James Borger.

Dealers have continued to focus on China, which is steadily expanding and, by some accounts, is now the source of up to half of all Asian fixed-income credit trading volumes. “For some global banks, Chinese product now accounts for significantly more than half their market-making activity in hard currency Asian credit, and because of their scale in China product, these banks have been able to make money despite tight quoting,” says Greenwich Associates Principal Parijat Banerjee.

E-Trading Picks Up the Pace

Electronic trading has been growing slowly in Asia but has accelerated significantly over the past 12 months. The fragmentation of the Asian market has slowed the progression of e-trading in credit relative to that seen in other major markets.  However in 2018, volumes started to build at a faster pace on electronic platforms in G3 credit, increasing to 31% of total trading volume from 24% in 2017. “Dealers have been focusing on specific names and issues, building liquidity, and clients are slowly climbing on board,” says James Borger.

Citi and HSBC have always led the pack in the breadth of clients’ reach through e-trading in Asian fixed income, and they maintained their top positions this year. But over the past 12 months, banks like Barclays, UBS, Nomura, and J.P. Morgan all increased their penetration of the market in e-trading. 

2018 Greenwich Leaders in Australia / New Zealand

The major Australian banks continue to dominate the credit business in Australia, with ANZ Bank further consolidating its position at the expense of other major banks in 2018. In the rates business, however, global dealers like Citi and UBS have put up strong competition and are as well positioned as the Australian majors, by cultivating deep relationships with the largest institutional clients in the market. 

The strong performance of global banks propelled Citi and UBS into a tie with ANZ Bank for the top spot on the list of the 2018 Greenwich Share Leaders in Overall Australian/New Zealand Fixed Income, followed by National Australia Bank, Commonwealth Bank of Australia and Westpac Banking Corp. However, domestic banks win the title of 2018 Greenwich Quality Leader in all three categories of Australian/New Zealand Fixed-Income Sales, Research and Trading. 

Click here for the list of 2018 Greenwich Leaders in Asian Fixed Income and Australian / New Zealand Fixed Income.