Deutsche has been awarded for its continuous success in providing multi-product services to its customers, and liquidity to the markets.
In May Deutsche took again a clear lead in Euromoney’s trading poll, scoring well ahead of number two Eurobond trading house Morgan Stanley Dean Witter in the overall rankings.
“Providing liquidity is fundamental in achieving excellent performance in the credit markets. But to be at the top, you need a well-coordinated link between the primary, secondary and derivatives trading business,” says Brian Reid, head of Deutsche’s credit trading group. “The developments in the European credit markets require that you look at the whole continuum of credit trading.”
In response to the more diversified and sophisticated investment approaches of clients, Deutsche has its sales department, the credit trading and the derivatives trading team working closely together, as well as the credit research and new issuance team.
And every part in Deutsche’s integrated approach functions in its own right. Reid explains that Deutsche’s sales team has put continuous efforts into building a deep institutional and retail client franchise. “The developments in this area were the key factor to our improved performance in eurobond trading.”
Also, credit research stepped to the fore of the trading business, following the increase in event risk in the market. Therefore Deutsche reorganized its bond business in February. It established a credit group that trades credit products – corporate, financial and high-yield debt – and can thus focus on credit spread movements and default risk.
Interest rate movements are analyzed by the liquidity group which covers government, agency, sovereign, supranational debt and Pfandbriefe.
Reid has upgraded his credit group by hiring more traders with a pure credit background, while the research team offers clients analysis of individual credits, as well as sector-to-sector analysis. “Our analysts now offer a variety of credit plays, and a view on credit 24 hours a day,” says Reid.
Deutsche’s integrated business approach will be extended online in form of dbmarkets.com, a multi-product and multi-service system. “By August, institutional investors will be able to access research material and comments, trading strategies, analytical tools and can execute their strategies across a whole range of products,” says Zar Amrolia, head of client e-business.
This new platform will give Deutsche another cutting edge in its e-strategy. According to Reid, next year’s winner will be the house that offers the technology that best meets the requirements of clients. He thinks it will be essential to invest in own brand, as well as in multi-dealer platforms. And Deutsche shines on both fronts. It is involved in EuroMTS, the platform for European benchmark issues, and its own-label distribution system, Autobahn, has been a huge success. This year, corporate bonds rated AAA and AA have been added to the more liquid products that were already tradable on the system. Autobahn’s 1,500 clients are now able to trade about 4,000 different bonds.
