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Asia
A
sian frontier markets for which
ratings have been received this year
include Bangladesh, Kazakhstan, Sri
Lanka and Vietnam. Of these, Vietnam
attracted the most responses, account-
ing for some 35% of the regional total.
As a whole, the markets mentioned
comprise 5% of the total responses re-
ceived for the 2020 ABFM survey.
These are admittedly disparate mar-
kets, with little in common in terms of
infrastructure and development. Never-
theless, something constructive can be
gleaned from aggregating their individ-
ual results. As at the end of February
2020, the MSCI Frontier Markets Asia
Index had registered a year-on-year
decline of almost 16% compared to the
MSCI Frontier Markets as a whole. The
fact that Vietnam is perceived as one of
the countries to have taken firm steps
to limit the domestic impact of corona-
virus may lead to further divergence in
the perception of this group of markets
as an investment destination in the
short-to-medium-term.
Nevertheless, from a post-trade
perspective, the markets concerned
present a relatively comforting front
to investors, at least from an asset
servicing perspective. Six category
scores – account management, asset
safety, cash management and FX, client
service, regulation and compliance, and
risk management – are all within Good
range (5.00-5.99).
Of the remainder, innovation, rela-
tionship management and pricing are
satisfactory, leaving asset servicing,
technology and liquidity management
in need of care and attention. It is, how-
ever, worth bearing in mind that these
scores are not absolute measures of
performance, but rather reflect the gap
between levels of service and expecta-
tions, which, in the case of technology,
for example, may be relatively high.
Of the four markets covered here, Sri
Lanka records the best results. Al-
though it has a particularly low score
for technology, this rises to Good when
considered on an unweighted base, the
implication being that the largest clients
COUNTRY SCORES Asia Bangladesh Kazakhstan Sri Lanka Vietnam
Account Management 5.09 3.74 5.00 5.71 5.38
Asset Safety 5.35 5.71 5.50 6.30 4.94
Asset Servicing 3.83 n/a 4.78 5.04 4.38
Cash Management and FX 5.27 5.20 5.75 4.75 5.28
Client Service 5.43 4.09 4.67 5.83 5.68
Innovation 4.21 3.00 4.17 3.87 5.22
Liquidity Management 3.42 7.00 4.00 6.50 n/a
Pricing 4.62 3.14 5.14 4.00 5.26
Regulation and Compliance 5.80 5.29 4.60 6.27 5.87
Relationship Management 4.19 3.16 4.63 4.47 4.47
Risk Management 5.30 4.89 5.00 5.86 5.20
Technology 2.72 n/a 5.67 n/a 3.63
are the least satisfied with this aspect
of service.
Two regional providers – HSBC
and Standard Chartered – qualify for
regional assessments. HSBC exceeds
the regional average in seven of the 12
categories, most noticeably asset servic-
ing, liquidity management and pricing.
Counter-intuitively perhaps, it falls
shortest in relationship management,
cash management and FX and tech-
nology. This last category is, however,
praised by one UK financial institution,
at least for Sri Lanka where it describes
HSBC as “forthcoming with new tech
initiatives.”
Standard Chartered surpasses the
market average in eight of the 12 cate-
gories, most notably asset servicing and
cash management and FX. Although its
score for relationship management is
only in satisfactory range, it is sufficient
to exceed the regional average by 0.53
points. In Bangladesh specifically, its
score for technology is brought low by
one large UK financial institution.
PROVIDER SCORES
(REGIONAL) Asia HSBC Versus regional
average Standard
Chartered Bank Versus regional
average
Account Management 5.09 5.36 0.26 4.98 -0.11
Asset Safety 5.35 4.83 -0.51 5.77 0.42
Asset Servicing 3.83 4.52 0.69 4.14 0.31
Cash Management and FX 5.27 4.11 -1.16 5.71 0.45
Client Service 5.43 5.47 0.04 5.38 -0.05
Innovation 4.21 4.22 0.01 4.18 -0.03
Liquidity Management 3.42 4.33 0.91 6.40 2.98
Pricing 4.62 5.09 0.47 4.27 -0.35
Regulation and Compliance 5.80 6.00 0.20 5.95 0.15
Relationship Management 4.19 2.94 -1.24 4.72 0.53
Risk Management 5.30 5.17 -0.13 5.48 0.18
Technology 2.72 n/a -1.06 3.52 0.79
Spring 2020
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