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On October 17, 2019, Bloomberg reports that “HSBC Considers Equity Pullback in London, New York, Germany.” We used this as a catalyst to add to our ongoing bank-owned broker-dealer modeling.
Here’s a review of Alphacution’s prior analysis in this space:
Alphacution has begun to assemble a composite model on bank-owned broker-dealer operations. Before now, we have conducted the first phase of modeling for:
- Goldman Sachs & Co.
- Morgan Stanley & Co.
- Deutsche Bank Securities, Inc.
- UBS Securities, LLC
- Credit Suisse Securities (USA), LLC
- J. P. Morgan Securities, LLC – formerly known as Bear Stearns & Co.
Among the notable players remaining, we still need to add Bank America / Merrill, Citigroup, Barclays, BNP Paribas and likely Nomura, too. In time, we could expand further from there…
However, given this latest news referenced at the opening, we now add SocGen’s and HSBC’s broker-dealer arms, SG Americas Securities, LLC and HSBC Securities USA, Inc., respectively, to our ongoing monitoring of this story – particularly given what it may mean for the buy-side players, which we first detailed in our all-time most popular Feed post to date, “Top 100 Players in US Listed Market Structure;” a broader story that Alphacution is following quite closely…
Anyway, if we return to the US equity sales and trading market share chart (below) – first published to the Feed here – it’s not difficult to see why HSBC may be considering throwing in the towel in the US, and along with other major financial centers with the exception of those in APAC. They are at the bottom of the league tables, below Deutsche Bank, which was an early towel thrower…
The main questions now are: How pervasive does this trend become among the banks? And then, how do the ranks shift among the banks (and also, between the sell-side and the buyside)?
For now, we’re not going to get too deep in the weeds, particularly since we have yet to add some of the bigger players to the analysis. When we get to those, you will be the first to know. However, as an interim takeaway, consider that the topic here is much more, much bigger than an equities story. For all of these players, this is also a fixed income story as well as an asset management / wealth management story, too. When Alphacution can show how all that is tied together, we will be adding a few sell-side case studies to our library, starting with Goldman Sachs and Morgan Stanley…
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