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19th February 2020 | Article

Covid-19 spread hits derivatives revenues in Asia

Major divergence in outlook and revenues last month as virus fears grow.

London — 19 February

The impact that the outbreak of the Covid-19 virus is having on revenues for derivatives firms was quantified this month with the latest Acuiti Derivatives Insight Report finding sharp drops in revenues for respondents in Hong Kong and China.

While the overall revenue performance in January continued its positive trend, many respondents from Hong Kong and China reported sharp falls in revenues for the month.

In addition, confidence in future revenue growth slumped across Asia with 60% of respondents predicting a deterioration in trading conditions over the next three months compared to just 7% in Europe.

The findings stand in the face of what was otherwise another positive month for global derivatives markets.

While bank revenue growth fell back after two strong months at the end of 2019, the performance of brokers and non-bank FCMs bounced back emerging from a challenging environment in the run-up to year-end.

The performance of proprietary trading firms was mixed with volatility in the energy markets during January creating clear winners and losers for the month.

“The divergence of outlook between continents we saw this month is by far the highest we have found to date,” said Will Mitting, managing director of Acuiti.

“While the market volatility around the spread of the virus serves as a reminder of the need for firms to hedge risk and boosts derivatives volumes, the threat to the normal functioning of markets is clearly a major concern for market participants close to the epicenter of the outbreak.”

The monthly Acuiti Derivatives Insight Report is compiled from submissions from Acuiti’s network of over 550 senior executives in the global derivatives markets.

The report covers revenues, outlook and is complemented by a quarterly analysis of cost bases, headcounts and barriers to growth.

To apply to join the Acuiti network and get the opportunity to take part in and receive a free copy of the Acuiti Derivatives Insight Report, visit acuiti.io

 

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For more information, contact Will Mitting

Tel.: +44 (0) 203 998 9190

Email: willmitting@acuiti.io

 

About Acuiti

Acuiti is a management intelligence platform designed to provide senior executives with unparalleled insight into business operations and industry-wide performance. Acuiti helps identify market trends, enhance decision-making and benchmark company performance. The platform anonymises and aggregates information from its exclusive network of senior industry figures to provide insightful in-depth analysis.