At ASEAN powerhouse CIMB Group, Andrew Freyre-Sanders, head of equity electronic execution services, says after months looking under the hood, he is confident the broker's new execution offering will become one of the most competitive in Asia.
CIMB agreed to pay US$140 million in April for some of the Asian assets of loss-making Royal Bank of Scotland (RBS). The assets included its cash equities businesses in Australia, Hong Kong and the China mainland and Taiwan, as well as two equities distribution divisions in New York and London.
And in the execution space, Freyre-Sanders – former RBS global head of client electronic execution based out of Hong Kong – sees the rise of CIMB as a global player as a distinct possibility.
“We may not be as well-known outside of Asia yet, but CIMB is a top firm in its core markets,” said Freyre-Sanders of the firm, which is number one in Malaysia for equities and fixed income and top five in both Indonesia and Singapore. “You take that high-profile presence in ASEAN markets, a strong retail base – and the RBS franchises they bought in Australia, Taiwan, Hong Kong and China, as well as possible new licences in India and Korea – and you have a powerful proposition,” said Freyre-Sanders, who left J.P. Morgan in 2008 to build RBS' execution business in the region and has been working away quietly at building similar capabilities at CIMB since the buy-out.
Speaking exclusively to theTRADEnews.com, Freyre-Sanders said CIMB’s home markets are quickly becoming more relevant to investors from Europe and the United States, making the Malaysian bank’s access and execution services highly attractive: “The ASEAN story can’t be talked about enough. Indonesia now has a population approaching that of the US. Our strong footing in these markets includes a full broking presence, sales trading and execution.”
He said it was important to understand Asia as a multi-local region with local countries and local providers.
“Look at liquidity in Asia – it is still essentially 60% retail, 20% local institutions, then the rest is international investors,” Freyre-Sanders said, adding that CIMB is one operation which understands innately how Asia trades. “We also understand that direct market access and algorithmic trading is an important component of the future shape of the broking industry in Asia.”
An important part of CIMB’s RBS acquisition was the electronic execution offering. And while in the autumn of 2007 a US$49 billion purchase by RBS of ABN Amro may have been at a premium which eventually led to the institution’s downfall and a £45 billion bailout by the UK government, the eventual result was a good opportunity for CIMB Group.
“CIMB is building a full suite of algo and back-office functions and we are in the process of getting up and running,” said Freyre-Sanders, adding that their first market – Australia – is already functional. “There is also a market impact story to be explored, with the possibility of leveraging the liquidity we already have in visible markets such as Malaysia and Indonesia. Clients will experience what we’ve done before with an extra local understanding of local markets.”