FX Markets Asia Awards 2020: FX house of the year, Hong Kong and FX house of the year, Singapore

In a challenging year, OCBC’s teams in Hong Kong and Singapore have continued to grow the bank’s franchise, deepen client relationships and drive engagement. We spoke to the global treasury team’s Wee Wei Min, global head of sales and structuring, and Claire Chin, regional head of corporate sales and structuring

We have seen some extraordinary market conditions during 2020. How has OCBC responded to meet clients’ needs?

Wee Wei Min: One challenge for market-makers during Covid-19 has been that depth of market liquidity was impacted in various asset classes. Through constant dialogue with customers, observations of hedging decisions, analysis of their portfolios and engagement with corporate partners, we have been able to consistently recommend the right structures for our customers, be it in the hedging of FX or interest rates, or in the investment arena.

From April 2020, with the circuit-breaker period still in effect in Singapore, we took the highly regulated wealth advisory process – a complex face-to-face process involving more than 50 pages of documents and a comprehensive Financial Needs Analysis – online. The sale of wealth management products increased 45% in the first 10 days of launch compared with the previous 10 days. The products handled ranged from unit trusts to bancassurance products, and from structured investments and bonds to FX products.

 

What did you do to keep the trading desks open and serving your clients?

Wee Wei Min: With the Covid-19 measures implemented in Hong Kong, Singapore and regionally, building the e-FX pricing engine helped us successfully implement working from home. Real-time pricing is available via our e-channels, and the sales team need not manually call out to the trading team for pricing. With our implementation of cross-entity credit check, risk can now be owned by any trading centre so, if there is a complete lockdown in one centre, risk ownership for any currency pair can be passed to another: Singapore, Hong Kong, London or even Malaysia. 

 

Volatility brings opportunities – what have you done to help clients stay ahead?

Claire Chin: On the research front, the team is always tasked to come up with trade ideas to generate alpha. In the context of the Covid-19 situation, the FX team has pivoted towards communicating its output through virtual means for both internal and external clients. This has the advantage of making the research output easily accessible to clients and has helped reach a larger audience. These efforts have included the launch of a new podcast and a daily Covid-19 Global Monitor since the end of January to keep our clients up to date with the latest developments of Covid-19.

We have also further enhanced the data analytics platform. We are able to identify which clients have impending FX, interest rate exposure and investment maturities, and can leverage such technology to gain an early foothold into our clients’ business ventures. 

Each salesperson now has a customer dashboard that provides access to their clients’ exposure and historical transactional records. For example, in a scenario where the euro has been volatile, we are able to extract all the data of the clients with euro exposure within a few clicks and provide real-time updates and solutions. We continue to update this dynamic dashboard, which is slated to include additional artificial intelligence capabilities such as predictive analytics on potential FX movements.

 

Singapore is one of the region’s leaders in transitioning to alternative benchmark rates. How is OCBC managing the switch?

Claire Chin: The benchmark reforms will be taking place in the loan market as well as on the derivatives platform. OCBC was the first bank in Singapore to ink a loan facility agreement referencing the new benchmark Singapore overnight rate average (Sora) with our customers, and we also executed the inaugural Singapore dollar Sora hedge. This is a milestone in the industry’s transition road map towards adopting Sora as the new interest rate benchmark for the Singapore dollar cash and derivatives markets.

 

How has the FX team contributed to OCBC’s ESG initiatives?

Wee Wei Min: We have supported financing for sustainable development and other infrastructure project deals through long-term hedges on clients’ underlying loans. We have also done hedges in vanilla interest-rate swaps as well as cross-currency swaps for Green Mark financed property projects, such as when the loan is raised in Australian dollars and swapped into Singapore dollars to match clients’ cashflows.

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