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| Results index | ||
| Buy side excited by multiple choice | HSBC raises its game | |
| Banks take fight to the algo traders | Methodology | |
The push into the emerging markets is self-explanatory, where currency flows mimic the emerging markets growth story, and as Chinese authorities gradually relax currency controls. That liberalization has included the Hong Kong-based renminbi market starting trading in 2010, as well as options markets, and most recently the opening up of an onshore options market.
It isn’t just about China. “Some people consider Asia to be one region, but it’s more complex than that with China, southeast Asia, northeast Asia and Japan. It is really varied,” Boillereau explains. He adds: “My team and I spend a lot of time there ensuring we have the right people in place delivering our strategy locally and linking our global opportunities together,” referring to the emerging south-south dynamic that is becoming a dominant theme in global finance.
The attention paid to Asia has yielded dividends in this year’s Euromoney FX survey. In the qualitative client poll, HSBC made a clean sweep of the emerging markets, being rated the best service provider for spot, forwards and options across the entire sector. That’s now beginning to manifest itself in client categories, where HSBC hasn’t been historically strong. Moreover its market share has risen by more than a third in this year’s poll, the biggest out of any of the top 10 banks. While some of this increase can be attributed to the increased number of corporates voting this year – a traditional stronghold for the bank – HSBC has made big strides in the real-money client sector, gaining three places from 10th to seventh – again the largest move among the top 10 banks.
Money managers tell Euromoney that part of the appeal of HSBC is its strong credit rating and its established links to Asia. “So much of the global macro story is about Asia and China, and HSBC has that presence and economic insight,” says a London-based asset manager.
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The volumes have yet to be a big contributor to revenues, but HSBC is installing a discipline within its team so that it will solidify its dominance, says Boillereau. “You need to demonstrate expertise in new markets. Each trader needs to know how the CNH market is developing, from change of market regulations to payments protocols. HSBC must be seen at the forefront of this market.”
Boillereau is two-thirds of the way through his three-year plan to transform HSBC into a top-three FX player, but he still has much to do, including the implementation of the bank’s e-commerce and prime brokerage platforms. By his own admission, HSBC has been slower than it had originally intended to be in rolling out the platform. So last year it took the tactical decision to increase its liquidity provision to multi-dealer platforms, where it has gained a big market share on FXall, and improved its API delivery to increase its visibility and gain market share.
“To go to the next level, we must now deliver our strategic technology,” says Boillereau. “Our tactical progress so far has enabled us to improve market share. Our service quality has already gone up significantly and clients now see much improved pricing, which has led to an increase in global volumes.” HSBC is now starting to release its new platform to internal clients, and hopes to go live to its external clients in early 2012.
It’s the last piece of the puzzle, the final phase of Boillereau’s plan. “We have the benefit of being the last in the game for this kind of technology, in the top banks,” he says. “
