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IEM Finance undertook its twelfth online survey with the French primary dealers’ clients (SVTs) from September 15th to October 10th, 2014. This survey aims to assess both the quality of commercial relations and services provided by primary dealers to their clients, and the clients’ opinion on the functioning of the French government debt market.
In 2014, 297 primary dealers’ clients filled out the questionnaire. The response rate is 30%.
Main results of the Survey:
1- The French government debt market:
Investors’ satisfaction on the functioning of the French government debt market is at its highest level since the first survey in 2003: 97.9% declare to be “very satisfied” or “satisfied” compared to 95.2% in 2013.
The liquidity of securities issued by the Agence France Trésor (AFT) is particularly appreciated by investors: BTAN and OAT liquidity is the most appreciated with 96.1% of investors “very satisfied” or “satisfied”. The assessment of investors on the liquidity of inflation-indexed securities improves significantly, although inferior to nominal bonds: 72.2% of investors who expressed themselves on this question (i.e. 68%) are satisfied, up from 68.4% of investors were satisfied in 2013.
Regarding the strategy of AFT to introduce more flexibility in the choice of securities to be issued, with the reopening of old lines at auctions (“off-the-run”), a large majority of investors are “very satisfied” or “satisfied”; their proportion increases in comparison with 2013 (from 94.2% in 2013 to 95.5% in 2014).
The proportion of investors who have been in contact with the AFT within the last 12 months decreases slightly in 2014 (23.6% compared to 27.7% in 2013).
2- Primary dealers - SVTs:
- On fixed-income markets in general, the five top-ranked primary dealers most frequently mentioned by investors who expressed themselves as being their main partner are:
| 2014 | 2013 |
| 1 – BNP Paribas 2 – Barclays 3 – Citigroup 4 – Société Générale 5 – JP Morgan |
1 – Barclays 2 – BNP Paribas 3 – Citigroup 4 – JP Morgan 4 – Morgan Stanley |
- On the French government bond market, the five top-ranked primary dealers most frequently mentioned by investors who expressed themselves as being their main partner are:
| 2014 | 2013 |
| 1 – BNP Paribas 2 – Société Générale 3 – Crédit Agricole 4 – Barclays 5 – Natixis 5 – HSBC |
1 – BNP Paribas 2 – Société Générale 3 – Barclays 4 – Natixis 5 – Crédit Agricole 5 – HSBC |
- An increasingly important criterion when selecting an intermediary is whether the intermediary is a primary dealer or not: 70% of investors consider it as “very important” or “important”. The League Table of the most active primary dealers published by the AFT at the end of January, which assesses the most active SVTs in the primary and secondary markets and qualitative criterion, remains the second most important factor when selecting financial intermediaries by investors.
- Investors gave their opinion on the importance they attached to the quality of different services offered by the primary dealers:
- The pricing is once again considered to be the most important service; however, the proportion of investors considering it “very important” slightly declines, after a significant increase in 2013. It reaches 84.6% in 2014, compared to 89.6% in 2013 and 85.5% in 2012.
- The quality of information, advice and sales coverage remain the second most important service and is considered to be “very important” by more than half of investors (54.7% compared to 54.5% in 2013 and 52.9% in 2012).
- The perceived importance of research decreased slightly in 2014 with 42.7% of investors who assessed it as “very important”, down from 43.5% in 2013.
- 21.4% of investors consider the back / middle office as "very important”.
- The average of marks obtained by primary dealers increases slightly for three services. The quality of pricing was better assessed by investors than in 2013 with an average mark increasing to 7.5/10 compared to 7.3/10 in 2013. Research remains the best ranked service with an average mark of 7.5/10. The average mark for the quality of information, advice and sales coverage is 7.4/10 compared to 7.3/10 in 2013.