Yesterday, Greenwich Associates, a research-based consulting firm in institutional financial services, announced its 2007 U.S. fixed income dealer rankings, which place Lehman Brothers and JPMorgan in joint top position. According to the rankings, the firms have the biggest market shares in U.S. fixed income trading and are also rated by institutional investors as delivering the best service quality across fixed income sales, research and trading.
Each year, Greenwich Associates interviews roughly 1,300 institutional investors active in fixed income trading. These investors are asked to name the dealers with whom they trade, to reveal how much of their trading business is allocated to each dealer, and to rate the service quality delivered by the dealers in a variety of categories.
According to Greenwich Associates, in terms of market share in U.S. fixed-income trading, the two leaders are followed by Deutsche Bank, Goldman Sachs and Banc of America.
"Of the firms with top-five rankings in market share, Banc of America, Deutsche Bank and JPMorgan all grew their fixed-income trading businesses over the past 12 months, suggesting that these franchises are generating significant momentum," says Tim Sangston, consultant, Greenwich Associates.
"Also demonstrating momentum in terms of overall market share growth were Merrill Lynch and RBS Greenwich Capital. Lehman Brothers, by comparison, has had consistently high market share for several years," continues Sangston.
According to Greenwich Associates, certain firms made notable market share gains in individual fixed-income product categories. Merrill Lynch and Credit Suisse increased their market shares in rates products, Morgan Stanley grew its market share in credit products, and Banc of America"s market share expanded in securitised products.
"It is interesting to note that three foreign firms, Deutsche Bank, RBS Greenwich Capital and Barclays Capital, increased their market shares in at least two product categories from 2006 to 2007," comments Frank Feenstra, consultant, Greenwich Associates. "These results certainly suggest that the significant investments that some foreign firms are making in U.S. fixed income are paying off, at least in terms of market share."