Securities Services Industry trends 2022
As 2022 kicks off, we look at the themes that are likely to matter to your business this year: Digital Assets, Sustainability, Private Capital, Clearing in APAC.
I hope you find this special edition of Quintessence magazine an interesting read.
My team and I look forward to discussing your priorities for this year and beyond.
Global Outlook 2022: bullish – selectively
While many see a risk of stagflation, Markets 360 analysts expect global growth – China being a notable exception – to exceed both consensus and its trend rate in 2022 and 2023, and are selectively bullish on financial markets. The emergence of the omicron variant is likely to affect the short term-path of activity and inflation but does not substantially alter our positive view of the medium-term outlook for the global economy.
Developed & emerging markets
Markets 360 experts think that while on developed markets headline inflation will slow, on emerging markets, with central banks under pressure to raise interest rates to fight inflation, lower growth is foreseeable.
G10 rates
Markets 360 experts expect volatility to remain high in 2022 due to the uncertainty of central bank policy normalisation.
Equities
Markets 360 strategists expect bullish equity markets in 2022, particularly in H1, as long as real yields remain in negative territory.
Credit
Despite its overall bullish view on markets, the Credit 360 team is bearish on credit in 2022 due to quantitative easing tapering that suggests outflows at a time when issuance continues to be robust.
Commodities
The Markets 360 commodity desk strategy team has a bearish outlook overall on silver, copper, nickel and aluminium, expecting a short-term rise in the Brent oil price followed by a decline in 2022.
ESG
After the long-awaited COP26, the focus on sustainability and ESG is likely to increase in 2022, reflected in bond market issuance that the Markets 360 team expects to rise by 60%.
Digital assets have a bright future
Blockchain and digital assets can create new market opportunities for investors seeking diversification and for issuers looking for new funding. From 2023, a new European regulatory framework should be in place to support a continental market for digital assets.
Despite a lack of regulatory harmonisation, the potential for growth of a European market for digital assets means the stakes are high.
Daniel Turquety, Deputy Head of CIB Digital, BNP Paribas
The industrialisation of private capital
Sustained inflows into private capital are placing growing pressure on operational infrastructure that is struggling to keep pace with investor appetite.
How sound data and analytics can help boost ESG’s credibility
Investor appetite for ESG solutions is growing, and ESG products are more numerous each day. But investors are still looking for sound data and analytical tools to verify corporate and sovereign ESG claims.
This multiple-source, data-market approach is effectively an evolving ecosystem of applications and providers, not a preconfigured tool.
Patrice Hiddinga, Chief Executive Officer, Manaos
The rise & rise of third-party clearing
In recent years, the demand for Third-Party Clearing (TPC) in Asia Pacific (APAC) has risen strongly, with brokerage firms shifting away from account operator or self-clearing models, and handing responsibility for clearing and settlement to external service providers. While the region is behind the likes of Europe in adopting TPC, demand for the model continues to gain momentum.
The appeal of this model is magnified by the impact of other trends. Fee compression, for example, has made it more difficult to maintain the status quo.
Large tier 1 bank
We hope that Quintessence brings you valuable insights and will help inform your decisions. Feel free to get the conversation flowing on these topics via Twitter (@BNPP2S) or our LinkedIn company page.
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