With a sizable number of researchers and traders to operate in its home market, J.P. Morgan has fully leveraged its scale to offer a very significant level of breadth and depth of liquidity to private clients in Asia. Equipped with research that is also driven by equity-linked notes (ELNs) and accumulator ideas and pricing, J.P. Morgan executes structured products with a minimum notional value of US$5 million and as high as US$30 million on liquid deals, shouldering a level of overnight risk not many others can. “This is an overnight business and not everyone is committed taking risk which could go either way before markets open,” says J.P. Morgan’s Lemuel Lee, Executive Director and Co-Head of Equity ad Commodity Derivatives, North and South Asia.
“When market news breaks, are you going stand by your figures or are you going to walk away?”Taking into account the fact that achieving industry-leading volumes requires a high level of risk management, Lee highlights the culture of sales and trading collaboration at J.P. Morgan’s derivatives business. With regular weekly dialogue between sales and trading – a segment that is treated with the same intensity be it with trading desks in Asia or the US – and a robust platform that J.P. Morgan built over years, the American investment bank achieves daily levels of volume others will find hard to match, making an average of 30 to 50 equity flow trades per day.
With US equity derivatives being J.P. Morgan’s calling card, the sales team in Asia is recognised for every dollar of structured products sold even if the counter-party is based in the US – a trait that is unlike many other set-ups that incentivise a focus heavily-skewed towards Asia equity derivatives due to their sole bond with the local trading units. Lee stresses that it would be “unwise not to make the best of [J.P. Morgan’s] home court advantage” adding that US derivatives and structured products sales make up around half of its overall revenue.
Stellar capabilities in risk management and flexibility in offering liquidity, combined with a top-tier brand and franchise has made J.P. Morgan’s ascent to the throne unequivocal. With a near-unanimous vote by Asia’s private banking industry, J.P. Morgan is this year’s Best Provider of US Equity-linked Flow Structured Products.