| Why biggest isn’t always smartest | Methodology | Results tables | ||
| Equities | Fixed income | Non-bank fixed income |
| Foreign exchange | Non-bank foreign exchange | Derivatives |
| Corporate and investor services | ||
Best at electronic warrants services
Commerzbank
Commerzbank’s warrants web offering scored three and a half times more than its closest competitor in the Euromoney poll. The bank has dedicated websites for each of the seven major European markets that it covers.
The sites are packed with tools that help users to identify the particular warrant that best meets their needs, enabling them to compare warrants offered by competitors too, something that many of its competitors do not do provide.
The advanced suite of tools includes calculators, a scenario analyzer that shows how the price of the warrant is affected by changes in the underlying equity, and an advanced search facility that enables users to search by numerous criteria including delta and implied volatility.
The sites even include a hedging tool, which helps users to identify the best warrant to buy if they expect the price of the underlying to fall, and a cash extraction tool that suggests a warrant position that can be used by the investor to replace a cash position.
The sites have a strong focus on investor education. Users have access to a glossary of terms and an online educational course. Users can even view explanatory web videos.
Another big advantage of the site is the comprehensive access it offers to term sheets and prospectuses that are crucial for some investor groups.
The German site also features real-time prices and charting. PK
Best at algorithmic trading
Morgan Stanley
Morgan Stanley placed top in the poll for algorithmic trading amidst intense competition in what is at once the nerdiest and sexiest of electronic trading categories.
The bank’s Benchmark Execution Strategies (BXS) algorithms recalibrate continuously based on market movements for individual securities. Every 10 milliseconds, for example, volume information is fed back into the strategies and new, optimal trading trajectories are determined for each order.
Also integral to Morgan Stanley’s BXS product is a new advanced trade visualization tool based on a theoretical efficient frontier of trading. The efficient frontier of trading is a curve that describes the trade-off between speed of execution and market risk in terms of either the price moving against you if you trade slowly or of your trade having excessive market impact. Users are able to select the point along the curve they wish to trade at while Morgan Stanley’s algorithms define a strategy to meet the objective.
Morgan Stanley has also significantly improved its capabilities by extending its algorithms to futures trading, a service that will be fully rolled out globally this year. PK
Best at prime brokerage
Goldman Sachs
The focus of Goldman Sachs’ equity prime brokerage web-product development team over the past year or so has been on enhancing its already powerful suite of accounting and risk management tools by giving them the ability to pull together a wider range of available data pools.
Applications such as the Portfolio Management Tool are now able to draw on all the accounting, reporting, position and risk management data sets, enabling users to slice, dice and analyze their data in pretty much any way they might like.
Although the flexibility to customize reports and analyses is a powerful attraction for clients, many do not actually enjoy setting up and running the applications themselves. As a result Goldman has also found itself increasingly busy setting up the customized reports for its clients and sending them to these clients.
Another handy function that Goldman has recently been developing for its US clients is its tax tools. Hedge fund managers can now get the prime brokerage site to draw together all the information that they need to complete fillings such as a 144a or a 13f.
The site also enables clients to view their trades by their different tax treatments. Clients are then able to see which transactions could be liable to be taxed in particular ways.
Competition in prime brokerage, however, remains as fierce as ever. Although Goldman tops the poll in equity prime brokerage overall, arch-rival Morgan Stanley comes out top for customer satisfaction, with 59.02% of clients voting it very good or excellent compared with Goldman’s rating of 56.16%. PK
Best at equity research
UBS
UBS’s equity research website, Equity Client Portal, tops our poll as the favourite of investors. The site, which has long had advanced features such as downloadable valuation models for all the stocks covered by the bank and a stock screening tool, has undergone a behind-the-scenes overhaul. UBS has implemented a reverse proxy server, so that instead of replicating an internal environment for external users, there is now just one high-availability infrastructure; which in layman’s terms means that the website now runs faster and more reliably.
New tools have also been added. Premium clients can now use the Factor Asset Scoring Tool, known as Fast, that enables them to rank a selection of stocks based on weighted preferences of over 40 financial criteria selected by UBS’s quant team.
UBS’s site is easy to use and totally customizable. UBS has also been an early adopter of the RIXML programming language, which enables it to integrate targeted research directly with a client’s own portal so that the information arrives exactly the way the client wishes it to.
Although UBS has more clients using it for research, its website places only third in terms of customer satisfaction behind JPMorgan’s Morgan Markets platform and Goldman Sach’s equity research site.
Morgan Markets is an integrated research site that allows users easy access to research across multiple asset classes. An impressive 85.71% of its users voted it as very good or excellent compared with 77.78% for Goldman Sachs and 69.44% for UBS. PK
Best at programme trading
Morgan Stanley
Morgan Stanley has long been a leader in programme trading, a position cemented by its success in this year’s poll.
Clients particularly like its innovative design, customizability, advanced analytics and risk management tools, as evidenced by its top ranking in each of those sub -categories.
Crucially, Morgan Stanley also comes first for “connectivity to liquidity”, with a staggering 92.86% of users voting it very good or excellent, putting it nearly 30 percentage points ahead of its nearest rivals, JPMorgan and Goldman Sachs, which score just 66.67% and 62.5% respectively.
Users also voted Morgan Stanley’s product the most reliable and the bank was second in the important category of reporting/documentation, thanks to its Trade Views tool.
Morgan Stanley believes that the performance of its programme trading technology has also been improved thanks to the bank’s increased focus on its small-cap and mid-cap franchise. The success of electronic trading strategies is substantially underpinned by strong trading market share. Morgan Stanley’s efforts to improve its position in small- and mid-cap stocks has therefore played a big role in improving the performance of the bank’s programme trading technology in trading these stocks well. PK
Best at direct market access
Morgan Stanley
Morgan Stanley tops the poll in the direct market access service provider category, helped by its strong algorithmic trading capabilities and the thorough integration of its service with its broader product range in areas such as prime brokerage.
A greater proportion of clients voted its services the most innovative and the easiest to use than any other.
Lehman Brothers, however, shines in such areas as speed, analytics and reliability. An amazing 100% of Lehman’s voters said that its speed and reliability were very good or excellent.
The same proportion also thought that Lehman’s cross-product abilities in areas such as derivatives were very good or excellent while 87.5% praised its reporting and documentation tools.
Morgan Stanley also scored very highly in terms of reliability and speed, with over 90% of its voters praising its abilities. PK
Best at convertibles
UBS
Investors have voted UBS’s convertibles website their favourite. UBS’s site has always been popular for its extensive convertibles index data but the upgrading of its analytics tools seems to have won over more fans. UBS now offers its own internal convertibles pricing model to clients on the web so that they can use it for any convertible for which UBS offers a price.
Additionally, users are now able to download implied volatility and option price histories to an Excel spreadsheet on a single-security basis.
Access to related research is easy through the site, as is access to UBS’s electronic convertibles trading system, CBTrader Link.
UBS has also introduced a link to its increasingly popular synthetic and reverse convertibles database, which can also be modelled with the bank’s tools.
A useful feature that other sites have too is access to Europrospectus’s database of convertibles prospectuses, which covers over 90% of convertibles in the market.
UBS has also invested heavily in upgrading the site’s infrastructure so that it is now faster and more reliable than before. PK
Best at independent research
Citigroup Global Equities Online (Geo)
As part of the settlement reached between leading Wall Street banks and New York state attorney general Eliot Spitzer, those that settled must now offer access to independent equity research as well as their own.
The results of Euromoney’s poll show that Citigroup has managed to do this better than any other bank.
Since July 26 2004 Citigroup has made available independent third-party research to its clients, in US common and ADR securities, via its electronic research offering, Global Equities Online (GEO). Clients are able to view any independent research on companies covered by clicking a link and seeing a full listing of all research published about that stock over the past 12 months, with the source listed next to the title.
The size of each PDF file is listed to ensure clients are aware of any download delay that might be incurred depending on their bandwidth capabilities, and the area is fully searchable, by symbol, keyword and source. For those clients that do not have access to GEO, the offering is also made available over the phone. PK
Best at new issues Merrill Lynch
Investors voted overwhelmingly for Merrill Lynch’s equity new issues platform, built by I-Deal, as the one they use most, even though Citigroup uses the same technology on many of its deals.
The platform is an advanced bookbuilding programme that enables syndicate desks to easily accept and keep track of orders from its sales force, reducing the potential for error.
Syndicate staff can analyse the book by many criteria including investor nationality and investor type. The system can even be used to help syndicate bankers rank investors by quality, as it can keep track of which investors bought what when and hold information on their particular investment styles.
I-Deal helps the syndicate desk to keep track of new orders as they come in and can easily recalculate how much demand there is at different price levels.
A useful feature of the programme is how it can easily be used to share information with other banks in the syndicate. The level of openness can be controlled and banks lower down in the syndicate that lack the system themselves can easily add their own order to the book over the internet.
Issuers themselves can also gain access to certain views of the book if they like, keeping them involved in the process at all times. PK
