Domestic and international investors agree: The best equity sales team in China belongs to China International Capital Corp.
Over 1,300 buy-side analysts and money managers surveyed by Institutional Investor named CICC the No. 1 provider in the eighth annual All-China Sales Team.
CICC defended its pole position, which it has maintained since the survey first debuted in 2012. The bank’s mainland peer Huatai Securities — newly crowned the country’s top research provider in II’s All-China Research Team ranking — rose from last year’s fifth place finish to take second. UBS captured third place, making it the highest-ranked international firm. GF Securities placed fourth, while Guotai Junan Securities rounded out the top five.
In a year marked by uncertainty, especially around U.S. and Chinese trade relations, both international and domestic clients appreciated CICC’s ability to deliver pertinent research to evolving client bases, according to the firm’s head of equities, Haizhou Huang. “Domestic clients became more interested in global macro and strategy, and international clients became more interested in China’s macro and some sectors, especially in technologies, as well as these stocks listed in the Star Board in Shanghai,” he said. “CICC has been an industry leader in providing quality research in all these areas.”
According to Huang, the sales team added more than thirty new positions over the last year and comprises over 100 staff based in Beijing, Shanghai, Shenzhen, Hong Kong, Singapore, London, and New York. “We have been building up our teams further, through recruiting the best talents from industry and campus,” he said. “We also took advantage of the global financial industry consolidation this year by hiring team leaders from some of our global competitors.”
In addition to the overall ranking, the All-China Sales Team survey was segmented into mainland and international voters to provide two additional leaderboards. CICC topped both of these.
While mainland voters favored domestic providers, international investors gave three of the top-five positions to international firms. Citi’s sales squad placed second among voters outside of China, while UBS took third and Bank of America Merrill Lynch ranked fifth.
Thomas Fang, head of China global markets at UBS, commented that it was both a “volatile and eventful year,” with the MSCI China index swinging nearly 30 percent from peak to trough and a quadrupling of A-shares inclusion by index-provider MSCI.
“We started the year strong with expectations of slower earnings growth digested, and sentiment boosted by monetary and fiscal easing,” he said. “Markets deteriorated after the first quarter on the back of trade tensions escalation, and global growth concerns resurfaced.” Thanks to the increasing inclusion of Chinese securities in benchmarks like MSCI’s indexes, Fang said that allocators “will now have to look at China allocation holistically, and there should be a mutual lift in bonds and equities positioning.”
2019 marked record flows coming to China, he added, and — with recent trade tensions easing — Fang said that both local and global investors appear cautiously optimistic going into 2020.
The UBS executive has also noticed a change in how both domestic and international investors want to consume research. “We see a notable pickup in more data, evidence-based research demand,” he said. “We also see heightened demand in corporate access, and on-the-ground expert insights into trade tension with the U.S., RMB depreciation, growth moderation, policy signals, and the changing consumption trends in China. We help our clients navigate through the rockier environment, with evidence-based research in macro, sector thematics and single stock; and provide bespoke corporate access and conferences into China.”
Lately, he said, the demands of domestic and international clients have been “converging, as increasingly they are framing investment debates through each other’s lens.”