To purchase printed copies or a PDF of this report, please email leonie.welss@lseg.com and shahid.hamid@lseg.com
Game of two halves
In a year of stark contrasts, risk management and diversification were the difference between a strong half and a strong year. For one bank, better integration, cutting-edge technology and a content-driven model proved crucial in navigating extreme volatility to deliver double-digit growth. Morgan Stanley is IFR’s Equity Derivatives House of the Year.
Game-changer
As trading of standardised swaps became established on mandated electronic venues and banks came under increased capital pressures, opportunities emerged for alternative liquidity providers. For understanding the importance of price and efficiency, and establishing a paradigm for how swaps markets may operate in the future, Citadel Securities is IFR’s Interest Rate Derivatives House of the Year.
Growth against the grain
As competitors retrenched further, one bank cemented its growth trajectory with a series of acquisitions to solidify a market-leading franchise in investment products and bespoke hedging solutions. For sustained commitment to expansion in the face of extreme market headwinds, Societe Generale is IFR’s Commodity Derivatives House of the Year.
Back in 1992, IFR’s Duncan Balsbaugh got a ringside seat from his position on Morgan Stanley’s London trading desk to watch George Soros’s attack on sterling. They say you can’t fight central banks, but as Soros showed, you can – and you should!
A plunge in commodity prices has left many energy exploration and production companies locked out of markets and struggling to refinance. Some are starting to get creative in an effort to ensure continued funding for their ongoing businesses.
Guidelines issued by the Fed, designed to limit leverage and reduce systemic risk, have made it harder for banks to compete in the leveraged lending business in the US. But while the leaders in the business have lost market share this year, lending remains healthy, with those borrowers looking for leverage able to find other options.
The central banks were once Olympian gods but have descended to be among men, and in doing so have lost many of their powers.
Low interest rates and rising equity valuations, and an investor base desperate for paper, drove an increase in exchangeable bond issuance in 2015. Corporates hesitated to issue bonds convertible into their own stock but leapt at the chance to use large cross-holdings for cheap financing.
The privatisation plan Narendra Modi touted when he came to power in India 18 months ago has failed to take off quite as the pro-business premier promised. Doubts over his reform agenda are mounting, but are they justified?
If 2015’s banking narrative was supposed to centre on a defensive strategy re-think, replete with slashed assets and diminished headcount, no one told Japan’s ambitious commercial mega-banks.
The dramatic rout that followed the latest bull run in China’s equity markets was a case of history repeating itself. Regulators are still grappling to understand the root cause, but they must realise there is only one solution – and it’s surprisingly simple.
Fast-growing companies seeking to build confidence in their business models and raise financing are increasingly turning towards private fundraising rounds. So far, the trend has been limited but it could become to IPOs what Uber is to public transport.
Securitisation has come a long way since the dark days of the financial crisis, when politicians – and many regulators – laid the blame for much of the chaos squarely at its feet. With both groups now broadly understanding the role it can play in stimulating lending, securitisation is on the march again, with a new and novel type of loan being considered for use in the asset pool.