CLSA Asia-Pacific Markets shoots straight in to first place in Institutional Investor’s debut All-India Trading Team ranking, which is based on the opinions of analysts and money managers at buy-side firms that acquire Indian equities research from multiple brokerage houses. Citi claims the No. 2 spot, followed by Morgan Stanley at No. 3.
“CLSA’s integrity in India trading and their understanding of the markets make them very valuable for us,” says one Hong Kong–based fund manager. (The names of those surveyed and the institutions they work for are kept confidential to ensure their continuing cooperation.)
Another buy-side enthusiast notes that the firm “continues to build out its offerings and make upgrades despite the low trading environment.”
That’s a question of cause and effect, explains Mumbai-based Mihir Doshi, who oversees CLSA’s four-member crew. The firm was one of the first to offer direct market access in Asia — including venues in Australia, Hong Kong, India, Japan, Singapore, South Korea, Taiwan and Thailand — and tailors its algorithms “to meet multiple needs of various types of investors,” Doshi says. “Given the increase in use of electronic trading, the challenge is to constantly show and prove to clients that our execution in highly liquid stocks is better than what one achieves through DMA.”
One U.S.-based backer praises the team’s customer service. “They’re pro-active and helpful, especially when it comes to block trades,” this investor says. “I feel like they’re really looking out for my needs.”
And they are, Doshi affirms. “We are an agency-driven brokerage, therefore we’re not influenced by internal proprietary trading book or corporate finance requirements,” he says. “Also we have the ability to source blocks and execute trades with minimum impact.”
Clients are similarly enthusiastic about Morgan Stanley’s squad of 14 — six in execution, five in equities cash sales and three in derivatives sales, all of whom are based in Mumbai under the direction of Parag Gude. “They provide a full range of services — soup to nuts,” declares one supporter. “And they’re very professional.”
Adds one Singapore-based backer: “They’re prompt, they’re reliable, and they’re accurate. In short, they deliver.”
And they plan to keep on doing just that, Gude says. “Over the past year Morgan Stanley has invested a lot in technology to improve algorithms for better price discovery,” he explains. Plus, “we have a strong technology team that supports our dealing system. Having an in-house-developed system, as opposed to vendor systems, helps us reduce recovery times at times of failures, and this gives us an edge over the competition.”
Another advantage? “They’re global. That’s a big plus — especially these days,” says one U.S.-based portfolio manager. “Their distribution network is second to none.”
One client sums up the firm’s strengths with three examples: “Good flow, timely execution, competitive risk pricing.”
II asked participants in the 2012 All-India Research Team survey to choose up to four firms whose trading services they feel outshine all others. We received responses from nearly 260 individuals at some 180 institutions that collectively manage roughly $100 billion in Indian equity assets. That’s about 47 percent of the people — representing 59 percent of the firms — who cast votes in the research team survey.