Tuesday, June 7, 2016 Stamford, CT USA — As brokers adjust their business strategies to cope with both the post-crisis regulatory framework and a slowdown in institutional trading activity, a top tier of U.S. bulge bracket firms last year established a solid claim as the leaders in U.S. cash equities.
In U.S. Equities Trading Share, the 2016 Greenwich Leaders tied at the top of the market are J.P. Morgan, Goldman Sachs, Bank of America Merrill Lynch, and Morgan Stanley, all with trading shares between 7.8%–8.3%. Credit Suisse rounds out the top five with a trading share of 7.0%.
“Depressed trading volumes have been a drag on revenues and earnings of all the global banks,” says Greenwich Associates Managing Director Jay Bennett. “In the resulting fierce competition for trading business, a “two-tier top-tier” profile exists, with the first tier doing 32% of the business and the second tier about 28%.”
In U.S. Equity Research/Advisory Vote Share, J.P. Morgan is in the top spot with a 10.1% share of the commission weighted institutional investor research/advisory vote, just ahead of Goldman Sachs at 9.5%. They are followed by Morgan Stanley and Bank of America Merrill Lynch, which are statistically tied at 8.1%–8.6%, and Credit Suisse and Barclays, which are tied at 6.2%–6.4%.
“Low-touch” electronic trades make up about 55% of U.S. equity trading volume for larger accounts and about 27% of the annual commission pool.
Goldman Sachs and Credit Suisse share the No. 1 spot as leading brokers in U.S. Equity Algorithmic Trading with algo commission weighted trading shares of 9.2–9.3%. Bank of America and J.P. Morgan are next with statistically tied shares of 7.6–8.3%, followed by Morgan Stanley and Sanford C. Bernstein in fifth place, with scores of 7.0–7.2%. These firms are the 2016 Greenwich Leaders in U.S. Equity Algorithmic Trading Share.