AWARDS Best bank for emerging Asian currencies: Standard Chartered

Over the past 12 months, one of the key market structure developments in emerging Asian foreign exchange has been the growing demand for central clearing of non-deliverable forwards as margin rules have driven up the cost of trading these contracts.

“Margin reform has pushed the interbank Asian NDF market towards central clearing. While so far, clearing has been largely restricted to interbank trades, we expect clients to demand clearing as well in the future, as part of the broader trend for post-trade clearing of over-the-counter products,” says Geoff Kot, head of FX cash in Asia at Standard Chartered Bank.

At the same time, clients have become increasingly sophisticated in their execution strategies, making more use of electronic trading channels for offshore Asian foreign exchange. Kot notes offshore clients are also becoming more comfortable with dealing with larger-sized tickets in restricted onshore deliverable markets.

One example is Malaysia, where the central bank imposed curbs on trading the ringgit last year, spurring offshore asset managers to increase their onshore participation significantly as liquidity declined outside the country.

Servicing the complex and diverse universe of emerging markets currencies in Asia is no small task, and one that requires scale and presence as much as competitive pricing powers. Still, competition in these currencies is becoming increasingly intense with new market-makers entering the space.

Asian FX continues to be a competitive market… demand from clients for Asian FX products continues to grow, as we have witnessed strong inflows into emerging markets in 2017

Geoff Kot, Standard Chartered Bank

“Asian FX continues to be a competitive market, attracting increased participation from non-bank liquidity providers as the electronic interbank market continues to grow. Moreover, demand from clients for Asian FX products continues to grow, as we have witnessed strong inflows into emerging markets in 2017,” Kot says.

Standard Chartered has been voted Best Bank for Emerging Asian Currencies at the 2017 FX Week Best Banks Awards. Despite competition having intensified, Kot says the firm’s network of on- and offshore offices – with significant treasury, wealth and retail offerings around the region – allows it to service a diverse set of clients and provide them with a cross-border product suite that is hard for rivals to replicate.

“Moreover, the quality and breadth of our research, sales, trading and structuring allows us to stay close to clients, and tailor solutions to their needs,” he says.

Going forward, Standard Chartered remains committed to providing world-class execution and execution advisory services in Asian FX, and it continues to invest in research and technological developments to prepare for the second Markets in Financial Instruments Directive and improve its product offering.

“Standard Chartered aims to be the bank of choice in Asian FX for our clients, offering a full suite of product capabilities across multiple channels, as regulations and market structure change. We aim to support the growth of Asian FX markets, working together with local regulators to promote best practice and high standards of conduct,” Kot adds.