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Here Are the Top Asia Trading and Execution Firms

Morgan Stanley once again took No. 1 overall, with J.P. Morgan rising one spot to second place and UBS placing third.

It has been a roller coaster of a year for traders and brokers in the Asia-Pacific region.

“The past year required our clients and us to operate in two very different trading environments, particularly in the Hong Kong and China markets,” said Patrick Kelly, head of cash equities, Asia Pacific at Credit Suisse. “The first quarter of 2021 saw a euphoric rally on record volumes, while the second half of the year saw a much more challenging trading environment, with reduced liquidity and increased volatility.”

The total turnover in Asia-Pacific surged from March through August of 2021 to a high of over $260 billion, then dropped through the later part of the year to around $200 billion per day, according to Credit Suisse reports. But with average daily turnover for 2021 at $210 billion, regional volumes remained much higher than in 2019 and 2020.

To navigate this bifurcated world, Kelly reported that the firm made investments in its Advanced Execution Services suite of algorithms, which allowed Credit Suisse to adapt quickly to this new trading regime. 

Sara Perring, head of APAC cash distribution at J.P. Morgan, confirmed that the region has had its ups and downs this year. “The APAC region continues to evolve, with constant development in market structure and liquidity, which is both a challenge and an opportunity,” she said.

Perring cited global geopolitical tensions, combined with the macro backdrop and evolving Covid-related restrictions in APAC, as contributing to the continued market disruption and uncertainty. “Being consistent in product and service offerings across all markets in the APAC region and bringing the breadth and depth of our global franchise has been crucial to our partnership with clients,” she added.

This consistency and investment have not gone unnoticed, as both Credit Suisse and J.P. Morgan are among the top group of firms recognized for trading and execution in Institutional Investor’s seventh annual All-Asia Trading Team survey. 

II polled traders of Asian ex-Japan equities, asking them to rate brokers on various attributes — such as access to markets and liquidity and service quality and support — for trading and execution. The attributes were aggregated to produce the best brokers overall across pan-Asia, high touch, electronic trading, and portfolio trading.

Additionally, this year’s survey results recognized the top three local brokers in Australia, New Zealand, China, Hong Kong, India, Singapore, South Korea, Taiwan, Thailand, Indonesia, Malaysia, Philippines, as well as across the frontier trading markets in Asia.

Morgan Stanley once again took No. 1 in overall pan-Asia trading and execution, while J.P. Morgan improved one spot to second place, with UBS placing third.

Morgan Stanley also topped portfolio trading, followed by J.P. Morgan in second, and Macquarie rounded out the top three firms lauded for attributes ranging from index and portfolio research to reliability of settlement. 

For high-touch sales trading, UBS was elevated to the pole position from last year’s third-place finish, based on its ability to access block, small- and mid-cap liquidity, maintain order anonymity, and minimize market impact, among other attributes. J.P. Morgan repeated its second-place finish, followed by BofA Securities. 

Charles Chiang, head of APAC Equities at J.P. Morgan, credited his firm’s performance as a top trading team to a “collaborative team culture, best-in-class technology, and consistency across markets and regions.”

“We have been progressively improving our execution service and enhancing our trading platforms over the last few years,” he added. “Our traders take a dedicated approach to clients’ trading needs while providing best-in-class tools to help clients remain focused on their objectives.”

Chiang acknowledged the year’s volatility across the region, where his firm has a strong presence. “Our complete regional offering has allowed us to continue to serve clients to the highest standard through all weathers,” he said. “We have well-planned strategies to front the most volatile trading days during the year — such as responding to market catalysts in a millisecond environment on some of the ultra low-latency trading days.”

Liquidity in the region remains a top priority for clients, according to Credit Suisse’s Kelly. Credit Suisse has addressed this by developing new internal systems to identify and manage natural liquidity across the different trading desks, maximizing the opportunities for clients to cross orders and reduce trade costs. 

Credit Suisse was once again the winner in the electronic trading category, with buy-side trading desks giving the firm top marks for algorithm customization and performance, in addition to market access and transparency. UBS and BofA Securities placed second and third, respectively.

Buy-side adoption of algo wheels, which automate routing, continues to grow in APAC and has increased by nearly 50 percent over the past four years, according to Credit Suisse’s Kelly. “As such, Credit Suisse’s electronic trading offering has evolved to meet bespoke requirements of different client wheels,” he said. “This ranges from quant-tested adjustments, to volume curves for meeting specific wheel objectives, to more adaptive models that incorporate volatility and price prediction.”

“Our new electronic trading infrastructure platform improves stability and enables greater customization of algorithms to respond to different market conditions, improving performance during volatility,” he added.

Looking ahead, Credit Suisse has added specialists in market structure and quant products to its APAC trading team as opportunities in the region — specifically China and its Qualified Foreign Institutional Investor (QFII) program — continue to open up. “China will continue to be a key growth area for trading via both Stock Connect and QFII, and we see opportunities there as the market becomes increasingly institutionalized and foreign fund inflows grow,” Kelly concluded.

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