Like the rest of the world, markets in Asia have been challenged this past year by macro events such as inflation and the additional hurdles of geopolitical uncertainty.
Because of this, investment in the region and market turnover has remained fairly subdued, said Sara Perring, head of Asia Pacific equities distribution at JPMorgan Chase. “Primary market transactions also remain muted, although India and Australia are enjoying more robust activity,” she added. “Our strong market share and strength of client relationships are helping to offset lackluster trading activity.”
They have also propelled JPMorgan to the top of Institutional Investor’s All-Asia Sales Team.
After last year’s second-place finish for JPMorgan, close to 1,300 respondents at more than 650 buy-side firms ranked the global bank as the No. 1 sell-side institution for its ability to add value to research, offer global context, and provide market knowledge and feel, among other attributes. UBS, this year’s runner-up after three straight years in the pole position, topped the other three attributes: idea generation, service and responsiveness, and understanding of client needs.
BofA Securities continued 2022’s upward momentum and improved another place to third. Morgan Stanley took fourth, and Citi rounded out the top five. In line with other II surveys, each vote was weighted by the respondent’s Asia (ex-Japan) equity commissions. An additional AUM-based leaderboard was also produced, which nearly mirrored its commission-based counterpart. In that ranking, Morgan Stanley placed third and BofA Securities came in fourth.
The Asia-Pacific region is not a monolith, and Perring credited the JPMorgan’s nuanced approach in the 12 countries throughout APAC, with sales team expertise differing according to location. “Sales teams in countries outside of Hong Kong and Singapore tend to have deep country expertise, and our sales teams in Hong Kong and Singapore tend to be more regional in focus,” she said “We also provide sales coverage of our international product in several locations across Asia, which is integrated locally providing clients the benefit of our large global footprint. Our sales teams focus on providing the service clients demand, which can range from long-term fundamental research, to short-term trading ideas, to insights and ideas on other asset classes.”
At UBS, there is also a mandate to deliver the best of the firm across the region to its clients. “Our sales teams are part of UBS Global Markets, and so we leverage our geographic footprint in APAC,” said Raymond Chan, co-head of global markets distribution for Asia and Japan. “There is a heavy emphasis on collaboration across teams to deliver market insights, help clients with alpha generation, and provide bespoke solutions. We differentiate ourselves through our digital sales strategy, which allows us to be the most productive, agile, data-driven and technology-enabled salesforce in the industry.”
Chan noted that the past year has been a volatile one filled with new concerns for investors — including the failure of U.S. regional banks and fading interest with the re-opening theme in some parts of Asia. “That said, a lot of this has now been priced in and we have shifted from reacting to bad news to waiting for catalysts to turn more constructive,” he added. “There is a lot of interest in the Japan markets, while China has gone through a tougher period with interest beginning to turn the corner now, depending on the location of the investor. Capital markets activity needs to pick up further.”
That may be why the buyside is clamoring for more of the sales team’s time and insights — and moving out of the virtual world that has dominated much of the region since 2020. “We definitely see increased client interactions from our teams, and the return of physical events and travel around the region has resumed,” Chan said. “Our client interactions grew 67 percent, with physical meetings being the biggest contributor.”
With markets gradually opening up through 2022, and into 2023, the return to physical meetings has been welcome, said JPMorgan’s Penning, who added that conferences have also returned and demand from hedge funds is also notable.
“Virtual meetings still have a place, but are used for more ‘just in time’ demand, whereas physical and in country trips are cited as providing deeper value in general,” she said. “Hedge fund platform expansion in the region is leading to increased demand for resources, particularly for differentiated corporate access. There also continues to be more interest in macro from equity clients, in particular from the platform hedge funds, who continue to expand their strategies across asset classes.”
Joseph Lee, head of Asia Pacific equity sales for Bank of America, reported that his firm has made “extensive investments” in both research and sales over the past several years, which “have helped strengthen [its] platform.”
The environment this year remains challenging for both macro and geopolitical reasons, according to Lee. “Stock picking supported by strong fundamental research with proper size and timing will be critical,” he added.
