Asset managers that invest in Asia ex-Japan and consume research from multiple brokerages say the trading services UBS provides outshine all others; the Swiss bank debuts in first place in Institutional Investor’s inaugural All-Asia Trading Team ranking, followed by Bank of America Merrill Lynch in second place and Morgan Stanley in third.
II asked participants in the 2012 All-Asia Research Team survey to rank the firms they use on the quality of trading services provided. Approximately 1,560 buy-siders from more than 700 firms that collectively manage an estimated $1.35 trillion in non-Japanese Asian equity assets responded to this question — that’s about 48 percent of the people who cast votes in the broader research team survey and represents 72 percent of its participating buy-side institutions.
“We’ve had a long relationship with UBS, and we work together as a partnership. Their sales traders are knowledgeable and experienced,” says one Hong Kong–based portfolio manager. (The names of those surveyed and the institutions they work for are kept confidential to ensure their continuing cooperation.) “From a technology point of view, they have good electronic tools — algorithms — which are regularly updated. They also have good flow and a dark pool matching engine that results in better prices.”
One U.S.-based backer concurs, crediting the firm with “competitive pricing” as well as “interesting block trade ideas.”
The firm’s regional trading team is organized around four main hubs in Hong Kong, Singapore, Sydney and Tokyo, with additional offices in China, India, Indonesia, Malaysia, the Philippines, South Korea, Taiwan and Thailand, according to Laurent Combalot, UBS’s head of Asia-Pacific equity client trading and execution.
“We offer on-the-ground sales, sales trading, execution and research, and we are committed to servicing both local and international clients,” he says. “Our broad regional footprint with local expertise enables us to offer tremendous insight and local color, and also provide the regional overlay that many clients seek.”
The firm regularly upgrades and enhances its trading systems, as well. “We continue to invest in and offer leading-edge, low-touch technology and algorithms such as our comprehensive Direct Execution platform,” Combalot adds. “We are introducing UBS Cross, a new liquidity venue, and Quod Studio, an iPad application that allows clients to collaborate with our algorithmic trading team members to rapidly design, simulate and develop execution strategies for trading.”
For one buy-side advocate, it’s the people who make a difference. “I highly regard their very constructive sales traders — Ed Holiday especially, but Mark Koh is also attentive and well plugged in on even the small- and midcap enterprises,” this investor says. “And their market timing guidance is often spot-on.”
Timing of a different sort is what one booster appreciates most about BofA Merrill. “Their order execution is very timely, and whenever I have a question or request for more information, they always respond very quickly,” this U.S.-based supporter says.
That’s because the trading crew is well positioned to respond to client demands — whatever they are, according to Ryan Holsheimer, Hong Kong–based head of Asia-Pacific equity execution services. “Our offering across the region is a fully integrated execution platform with sales traders consulting across all products — including futures, derivatives, stock loans, algorithms and facilitation,” he says. “We have also unified our structure to ensure that all execution channels are developed, operated and offered in a coordinated fashion — single-share, portfolio trading, futures, electronic and derivatives. We also became increasingly active in generating liquidity solutions for clients through block transactions.”
That last point is a particularly big hit with one customer. “They bring me a lot of suggestions for block trades — good suggestions,” this money manager says. “Having a global reach helps.”
And the firm plans to offer even more, Holsheimer says. “We have and will continue to selectively add in growth markets, such as Indonesia, and in growth products, including electronic, futures and facilitation trading,” he explains. “Our anticipated enhancement in these areas is in direct response to where we see client interest as the latest progression in the natural evolution of the marketplace.”