It’s a three-peat for UBS.
For the third year in a row, the bank is the top sales team in Asia as determined by voters in Institutional Investor’s annual survey of sales coverage in the region.
More than 1,200 respondents at 600 buy-side firms ranked sell-side institutions on their ability to add value to research, generate ideas, and understand client needs, among other attributes. UBS was recognized as No. 1 in three out of six of those, while J.P. Morgan, this year’s second-place winner, topped one. Morgan Stanley captured two accolades as well as placing third in the overall survey.
BofA Securities improved on last year’s sixth place to take fourth, while Credit Suisse repeated its fifth-place performance. Scores were weighted by a respondent’s Asia ex-Japan equity commissions. An additional AUM-weighted ranking was also calculated, and this closely mirrored the overall top 10 sales ranking.
Raymond Chan, head of Asia advisory sales for global markets at UBS, credited his firm’s performance amid a year marked by volatility due to geopolitical tensions, inflationary pressures, slowing economic growth, and a fundamental shift in central bank policy to raise rates. “Investors are witnessing one of the largest commodity disruptions since the 1970s, with supply imbalances from sanctions compounding [already] frayed supply chains,” Chan said. “We have seen downward [revisions] to company earnings from both higher costs and now lower growth.”
While some Asian economies have the scope to conduct stimulus, investors remain very cautious, he added. “Looking ahead, they need to assess the probability and potential duration of a stagflationary environment and consider how equity styles might perform through it,” Chan said. “China’s lockdown and anticipated reopening, as well as dry powder in terms of monetary and fiscal policy, could also potentially affect the market cycle in the near term.”
In a crowded field, Chan cited UBS’s geographic footprint in Asia-Pacific and collaboration across teams “to deliver market insights, help clients with alpha generation, and provide bespoke solutions by leveraging our Global Markets distribution and product teams.”
A digital sales strategy in 2022 is also key. “A top salesperson today must be ‘enhanced by technology,’ whether this is understanding the client wallet, the types of products they trade, or understanding the market debates that most interest them,” he added.
And as the pandemic entered its third year in the region, there have been ebbs and flows of reopenings and lockdowns, especially in China due to its Covid Zero approach, which meant that providers in Asia-Pacific — as well as their clients —had to remain flexible.
“The pandemic once again demonstrated the remarkable dedication and resilience of our talent,” said Jack Clein, Morgan Stanley’s head of equity distribution in Asia-Pacific. “Paradoxically, the demands of clients grew exponentially as business and personal travel continued to be logistically challenging. Our people adapted seamlessly and eagerly to the increased pressure on our resources.”
Clein said that Morgan Stanley’s sales team differentiates itself by cultivating and maintaining deep, long-standing relationships, not just in Asia but with organizations globally. “The way in which we link as an organization across the whole platform is one of the reasons [we’re] able to deliver such strong results consistently,” he said. “Fundamentally, we listen to our clients.”
UBS’s Chan said there are some signs that the business is returning to usual — in some countries. “Our sales teams are returning to normal working practice in countries that are ‘living with Covid,’ while the rest are dependent on local cases and restrictions,” he said. “Business travel has just started again, and clients are open to meeting with the sell-side, especially when they’re visiting from overseas.”
But the fact that, with the exception of a few countries, the overall level of mobility restrictions is at the lowest level since the start of the pandemic remains among the biggest challenge in the region, according to Chan. Additionally, inflation pressures persist as the market hopes to avert a recession, and geopolitical pressures mean that the progress to reduce supply-chain bottlenecks remains slow.
But opportunities still abound in the region, according to these top sales teams. “We are extremely excited by the growth potential of the regional client base, their ‘export’ contribution to our global business, and, equally, the growing appetite from U.S. and E.U. investors to do more in the region,” said Morgan Stanley’s Clein.
UBS’s Chan believes that the biggest opportunities lie in the ability to navigate across asset classes, and in strategies that reduce volatility and help clients preserve capital, at least in the short term. Additionally, it is clear that ESG factors are moving share prices in the region. “With ESG considerations now a part of the asset allocation process together with regulatory changes, it has become increasingly important to incorporate this topic in our service offering,” he said.