Taiwan’s domestic equities market appears to be governed by a few unshakeable laws. It has its own law of gravity, where sellers tend to be drawn to the same few securities houses, each of them regularly getting a market share of about 20%. There is a law of motion, which dictates the exact ranking of these firms is subject to change every few years.
There even appears to be a universal constant, which in this case is the percentage that Yuanta Securities represents of domestic equities trading. This was remarkably consistent across our awards period, never straying lower than 11.25% or higher than 11.5% from month to month.
Yuanta Securities, under chief executive Arthur Chen, can only rely on its own efforts for that, pitching hard for every deal and ensuring it makes the most of its distribution strength when offering primary equity solutions to its clients. It has done that consistently.
Its main rivals in the domestic market are KGI Securities, Taishin Securities and Fubon Securities. But judging by the last few years, only KGI Securities is in a position to challenge Yuanta’s reigning position.
During our awards period, KGI Securities managed more primary equity market deals than Yuanta, getting $1.54 billion of apportioned league credit across 37 deals, while Yuanta notched up $1.182 billion across 31 deals.
Yuanta has certainly missed out on a few chunky deals that helped its rivals boost their fee income. For instance, Fubon won sole bookrunner mandates on a $332.5 million deal for Highwealth Construction and a $432.3 million sale of Roo Hsing shares, impressive sizes for domestic share sales. Yuanta has relied on smaller deals to buffer its primary fee income.
But for its unquestioned dominance in trading and research, and its ability to always compete for the top spots in the ECM league tables, Yuanta is an obvious winner. The firm offers a clear example of what securities houses need to do to prosper, marrying a sharp underwriting team with an impressive broking network.
There may be no law ensuring Yuanta will remain the leader in Taiwan’s domestic market but, for now, other firms are in its orbit.