18 December 2012: Survey: SVTs as perceived by Investors

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IEM Finance undertook its tenth online survey of investors who are clients of the French primary dealers (SVTs) from October 23rd to November 28th, 2012. This survey, conducted on behalf of the French Treasury Agency, Agence France Trésor (AFT), aims to assess the quality of commercial relations and services provided by SVTs to their clients.

Aside from IEM Finance, no other party, including AFT, has access to the nominative answers provided by the survey’s participants.

305 SVT clients answered the questionnaire.

Main results of the survey:

- Among the five most frequently mentioned SVTs considered to be the main partner on fixed income markets in general, Barclays has retained its top position since 2007. In 2012, BNP Paribas and Deutsche Bank remained in the top five list of SVTs and maintained the same positions as in 2011, to the second and third positions respectively. Citigroup joined the leading group in fourth position, while HSBC remained in the leading group with its fifth position placement.

- Regarding the French Treasury securities market, ranking of SVTs changed only slightly in comparison to 2011. BNP Paribas retained its leading position as the SVT most frequently cited as the main partner for this particular market since the survey began in 2003. Natixis rose in the list to fourth place. Citigroup re-entered the leading group in fifth position.
(1 – BNP Paribas; 2 – Barclays; 3 – Société Générale; 4 – Natixis; 5 – Citigroup).

- The most important criterion when selecting an intermediary was whether or not the intermediary was an SVT. After the slight decreases observed in 2010 and 2011, the perceived importance of this factor increased this year to 68.9% of investors who consider it as “very important” when selecting an intermediary. The League Table published by the AFT remained the second most important factor when selecting SVTs.

- When asked what quality was expected from services offered by SVTs, the quality of pricing was once again considered to be the most important, despite a slight decrease in comparison to 2011 responses. The percentage of those surveyed who consider it to be “very important” decreased from 87.2% in 2011 to 85.5% in 2012. Following several years of decline, investors attach more importance to the quality of research, which has risen sharply since 2010 (40.9% in 2011 and 43.1% in 2012 ). This was in contrast to the perceived importance of the quality of services provided by back and middle offices, for which investors attach less importance. Less than one quarter of investors (24.2%) considered these services as “very important”. The percentage of those surveyed who consider the quality of information, advice and sales coverage as “very important” increased in 2012 (52.9% in 2012 against 50.4% in 2011).

- The average mark obtained by SVTs for the three services increased in comparison to 2011. The average marks obtained for the quality of information, advice and sales coverage (7.4/10) and for the quality of research (7.5/10) remained the highest. While the average mark of the quality of pricing had declined in 2011, this recovered this year to 7.2/10.

- In 2012, the ranking of the five best SVTs in terms of information coverage on French government issued products changed slightly from previous years. Crédit Agricole-CIB reentered the leading group in fifth position. The four remaining SVTs in the top five were BNP Paribas, Barclays, Société Générale and Deutsche Bank.

- The majority of those participating in the survey were satisfied with the change in the settlement date from T+1 to T+3 for BTANs and from T+1 to T+2 for BTFs on the secondary market.

- The percentage of those surveyed who were “very satisfied” or “satisfied” with the functioning of the French government debt market increased significantly to reach 94.4% compared to 84.5% in 2010.

- On all products issued by Agence France Trésor, a significant improvement of perceived liquidity was observed in 2012. A great majority of investors found liquidity on BTF, BTAN and OAT “very satisfactory” or “satisfactory”: respectively 73.6%, 89.1%, 92.9% compared to 66.6%, 80.6% and 81.7% in 2011.

- Regarding AFT’s strategy of introducing more flexibility in the choice of securities issued, such as proposing off-the-run securities, it satisfies an increasing number of respondents: 81.5 % in 2012 after 71.3% in 2011.

- The percentage of those surveyed who were in contact or wanted to get in contact with AFT rose once again in 2012.

Press contact:
Tân Le Quang
+33 1 4004 1550
+33 6 7224 0388