Global Derivatives Awards 2023: Interest Rate Derivatives House of the Year — Europe & Asia — Nomura
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Global Derivatives Awards 2023: Interest Rate Derivatives House of the Year — Europe & Asia — Nomura

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A volatile backdrop characterised by huge shifts in interest rates left clients searching for timely and strategic solutions. In a rapidly changing market, Nomura’s command of global market conditions and its peerless expertise across different products meant no firm was better able to support customers in 2022. The firm is a clear and deserved winner of Interest Rate Derivatives House of the Year for Europe & Asia.

Nomura has long been the number one market maker across a wide variety of interest rate derivatives and swaps, not only in Japan but across the wider Asian market. The firm’s management structure creates a single team across euro, dollar, sterling, yen and other Asian currencies that creates unique opportunities to serve clients more effectively. 

“It allows completely seamless trading from the London open to the New York close,” says Ali Khan, head of rates options and exotic trading. Not only does this help provide liquidity for customers wanting to trade dollar volatility during Asian trading hours, but it also helps inform the bank’s risk decisions. “It was particularly valuable to have this kind of transatlantic insight during the recent rate volatility,” says Khan. “Things happened a few months earlier in the US than Europe and we could assess and respond to the likely implications for the euro and Asian markets.”

The breadth of the firm’s coverage is matched by the depth and precision of its expertise. This allows Nomura to react instantly to market developments and provide customers with cutting-edge strategies. The upheaval in the UK government bond market that sent shockwaves through the country’s pension industry provides just one of many examples. As UK institutions were forced to sell inflation-linked gilts to meet liquidity calls, Nomura stepped up with vital liquidity solutions. “One of the ways Nomura was able to help clients was by opening a path to more flexible liquidity management,” says Anthony Morris, head of quantitative strategies. “In particular, the firm arranged for clients to use corporate bonds — not traditionally used as collateral in derivatives — to gain access to liquidity at a very difficult time.”

In early 2023, soaring rates resulted in the fall of both the US Silicon Valley Bank and Credit Suisse. The swings in US Treasury market were more intense than those seen during the collapse of Lehman Brothers and inflicted large losses on hedge funds. “Once again, Nomura came up with some incredibly useful ideas for clients during an exceptionally volatile period,” says Morris. “Nomura has been consistently ahead of the game in finding opportunities in swaptions, many of which made a serious difference to customers' results”.

Client connectivity key

Nomura has an exemplary history of being strong with a broad range of clients — from real money accounts to hedge funds. But part of what makes the firm stand out from peers is how it connects these clients to the different products and services that the bank offers. From trading solutions through to wider strategy and structuring. “Connectivity is a very important theme in how Nomura operates,” says Tina Rydberg, head of Nordic global market sales. “We are particularly good at connecting clients to our different leaders so that they can access the bank’s resources efficiently in a way that doesn’t feel siloed. When it comes to interest rate derivatives, that’s something we do very well.”

This feeds back into the bank’s ability to offer unrivalled trading solutions. Nomura’s connection to EMEA hedge funds allows its Asian real money clients an ideal avenue to offset risk. European real money accounts — from Nordic pension funds to Dutch bank treasuries — increasingly recognise Nomura as a top counterparty. Stronger relationships with these players has allowed the bank to tap into their demand for US dollar asset swap and flow rates derivatives products.

“The firm prides itself on making sure teams interact to provide a seamless experience for customers,” says Rydberg. “It's very important to deliver solutions quickly and that is only something you can do when you build up strong trust between teams and with clients.”

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