Credit Suisse has started offering onshore brokerage services in the Philippines, which will give its clients direct trading access to the local stock exchange.
The move comes after the Swiss bank bought an exchange trading right in October last year and after it received a securities broker-dealer licence for the Philippine Stock Exchange in February. Aside from sales trading, programme trading and execution, which went live last week, the onshore brokerage is also providing research and sales services.
The addition of the Philippines means Credit Suisse is now offering onshore sales and trading capabilities in 16 markets in Asia. In Southeast Asia, it has a leading exchange market share among foreign brokers in Singapore, Indonesia, Malaysia and Thailand, according to a company announcement.
The launch comes after the Philippine stock market rallied 37.6% last year, which made it the third best performer in Asia after Indonesia and Thailand. The gains did not continue into the new year, but after a tough January and February, buying interest returned last month and, as of yesterday, the benchmark index was down only 1.2% for the year so far. Also, trading volumes are continuing to rise, which makes it a good time to launch this business, according to Simon Paterno, Credit Suisse’s country manager for the Philippines.
But, more important, “our clients have been asking for it”, he told FinanceAsia in a phone interview. “They have said that they would much prefer that we had a brokerage on the ground to provide execution and research. And we have taken that comment to heart.”
He also noted that Credit Suisse is in this for the long run and therefore it doesn’t really matter at which point in the cycle it invests.
According to the announcement, Credit Suisse is the first major foreign brokerage to set up a business in the Philippines in 10 years. However, that doesn’t mean it isn’t a competitive market. CLSA, J.P. Morgan, Macquarie and UBS all have brokerage businesses onshore, while Deutsche Bank and Kim Eng are active in the market through joint ventures with domestic firms.
Credit Suisse is of course not new to the Philippines. It has been offering financial advisory services in the country since 1992, and according to Dealogic has advised on $14 billion worth of M&A deals involving Philippine companies since 1995. It has also helped arranged nearly $15 billion worth of debt and equity transactions in the country since 2002, including the Republic of the Philippines’ $1 billion global peso bond last year, which FinanceAsia named the best sovereign bond and the best Philippine deal in 2010.
It has also been offering trading on the Philippine Stock Exchange, although those trades have had to be channelled through other brokerage firms.
“The Philippines is a key market for Credit Suisse in Southeast Asia and we see tremendous growth opportunities,” said Osama Abbasi, Credit Suisse’s CEO for Asia-Pacific, in a written comment. The launch of a full cash equities business onshore underlines the bank’s long-term commitment to this market and complements its equities franchise in the region, he added.
The new business has brought with it some new key hires, although the on-the-ground team will stay small for now. Lito Vicencio has rejoined Credit Suisse as head of sales after stints with Kim Eng and the Government of Singapore Investment Corp.
It has also hired Dante Tinga Jr as head of research. Tinga has a background with Macquarie and Merrill Lynch and is joined by Haj Narvaez, another former Macquarie employee on the two-person Philippine research team.
And, according to Paterno, the bank is in the process of making a few more hires, within sales and trading in particular.
Photo provided by AFP.