While the exceptional market volatility ushered in by last year’s Russian invasion of Ukraine has ebbed, 2023 was still a difficult year for trading and execution in Europe.
“EMEA equity trading remains challenging and somewhat muted versus 2022, where the first half of the year saw the spike in volumes and volatility related to the war in Ukraine,” said Brian Gallagher, head of European execution for EMEA at BNP Paribas Exane. “The rise in interest rates as well as the lack of primary issuance in Europe have weighed heavily on the region and has also held back investor activity in the market.”
Meanwhile, the broker-dealer landscape has seen consolidation, with a number of high-profile combinations announced in both Europe and the U.S., Gallagher said. “The drivers of this consolidation vary but a central theme is having broader scale either by geography, additional product, or increased balance sheet,” he said.
But amid a relatively stable regulatory landscape, top brokers in the region have risen to this year’s challenges, according to respondents to Institutional Investor’s 2023 Developed Europe Trading Team survey.
JPMorgan Chase earned the overall top spot in this year’s survey, based on the votes of 273 individual traders and portfolio managers across 233 firms. It was followed by UBS in second and Goldman Sachs in third. BNP Paribas Exane secured fourth and Morgan Stanley rounded out the top five.
For the 2023 Developed Europe Trading Team, Institutional Investor polled buy-side traders and other investment professionals at asset management firms with investments in European equities, asking them to rate brokers on various attributes for trading and execution. We received responses from 273 individual traders and portfolio managers at 233 firms.
Respondents were asked to rank their trading services providers on attributes for Electronic Trading, High-Touch Trading, Portfolio Trading, and Delta One/ETFs.
Attributes for Electronic Trading:
- Algorithm Customization
- Algorithm Performance
- Market Access & Transparency
- Service Quality & Support
- Transaction Cost Analysis
Attributes for High-Touch Sales Trading:
- Access to Block Liquidity
- Access to Small / Midcap Liquidity
- Maintaining Order Anonymity
- Minimize Market Impact
- Quality of IOIs
- Service Quality
Attributes for Portfolio Trading:
- Client Service Quality & Support
- Global Market Access
- Index & Portfolio Research
- Pre and Post Trade
- Reliability of Settlement/Back Office
Attributes for Delta One/ETF:
- Access to Differential Liquidity
- Price Improvement
Participants first rated their top firms within each attribute on a scale from 1-5. A numerical score was produced by weighing each vote based on both the responding firm’s European equity commissions and their rating. Scores for each attribute were aggregated together to create the top Trading Leaders.