As Covid-19 ebbed and flowed across Asia for the past year and a half, the region’s top equity sales teams have had to adjust to their approach amid each different pandemic wave.
“The pandemic created challenges in terms of client engagement initially but the sales teams have adapted well and technology played a key role in enabling remote access from home,” said Raymond Chan, head of Asia Pacific advisory sales for UBS. “We have gone through several phases from fully working from home to split team arrangements depending on the office locations and the state of the lockdowns. As clients adapted to remote technologies, our pipeline of events have become more creative, more digital, and more content-rich as barriers to entry have come down.”
More than ever investors are demanding bespoke access to both corporates and experts, according to Chan, and UBS has invested heavily in technology to provide virtual conferences.
“We have also been developing our digital sales strategy, which allows us to be the most productive, agile, data-driven, and technology-enabled salesforce in the industry,” added Chan. This has meant the take-up of artificial intelligence and machine learning, including leveraging virtual bots to access information ranging from coverage, interactions, client interests and preferences. “The goal is to automate and optimize processes to allow salespeople to provide a truly customized offering and so build trusted relationships,” he added. “A top salesperson today must be enhanced by technology, so they can be at the top of their game every time they interact with clients.”
Some 1,100 voters at more than 560 buy-side firms rated sell-side firms for their sales coverage across the region based on six attributes: adding value to research, providing a global context, generating ideas, providing market knowledge, understanding client needs, and offering good service and responsiveness. The scores for each country were aggregated to produce a top 10 leaderboard of teams weighted by respondents’ equity commissions for Asia ex-Japan.
In this commission-weighted ranking, Morgan Stanley improved two spots to take second place this year. JPMorgan Chase & Co. once again finished third, while Citi fell to fourth. Credit Suisse moved up one place to round out the top five.
The same scores were also weighted by each respondent’s Asian ex-Japan equity assets under management to produce a second leaderboard. In these AUM-weighted rankings, UBS once again took first followed by Morgan Stanley in second and JPMorgan in third. Citi and Credit Suisse placed fourth and fifth, respectively.
“The crisis once again demonstrated the remarkable dedication and resilience of our talent,” said Mehdee Reza, head of Asia institutional equity distribution at Morgan Stanley. “Paradoxically the demands of the clients grew exponentially as business travel became almost obsolete overnight. Our people adapted seamlessly and eagerly to the increased pressure on our resources.”
Looking forward, Reza sees both domestic and global demand impacting Asia. “We are extremely excited by the continued growth of the regional client base, their contribution to our global business, and equally, the growing appetite from U.S. and E.U. investors to do more in the region.”
The markets have been defined by a series of events including unprecedented amounts of Fed-driven liquidity driving markets higher throughout 2020, the U.S. Elections, the roll-out of Covid vaccines, heightened volatility in 2021 given rising inflation expectations, the growth-to-value rotation, and the spectacular rise of the retail investor and their impact on stock prices, according to Chan of UBS.
“Asian equities are now discounting a very strong economic recovery,” he said. “However, while a stronger-than-expected economic recovery would potentially be good for earnings, it has implications for the direction of monetary policy. China is already slowing credit growth. How this plays out, alongside any potential tapering in the Fed’s balance sheet expansion, is likely to be a significant issue for Asian equities.”
But drivers in the region still look positive long-term, led by the continued opening of onshore Chinese capital markets, further reform, and the structural factors of innovation and financial de-risking. “We expect these to drive more investment into the region even if the short-term debate is increasingly likely to be over-shadowed by where monetary policy goes next,” Chan said.
UBS expects a phased re-opening of the region over the next six to twelve months. “A recent survey of corporate CFOs showed that [capital expenditure] intentions have picked up to the highest level since 2017 in China, and longer-term, Asian markets will refocus on corporate earnings and potential impact from changes in global monetary policy,” said Chan.
Together with regulatory changes, the rise of environmental, social, and governance investing means incorporating ESG into UBS’s service offering is paramount, he said.
“We continue to see the best opportunities in markets that are seeing client wallet growth. The race is on both to bring China to the world and the world to China,” Chan added. “UBS is well placed and resourced to do this.”