Oh what a year!
Best Execution spoke with Swissquote’s head of sales, Muamar Behnam about capital markets in 2020 and what he’s hoping for in 2021.
How did capital markets cope with Covid-19?
Quite well. After the dip early in the year and the exceptional events that occurred – with special mention here to oil briefly collapsing into negative territory – all markets recovered and ended the year on record levels. Incidentally lots of banks and brokers will be posting their best ever results after the massive volumes that were traded over this extraordinary year.
How did traders cope with remote working and will they go back in the office the minute they can?
Obviously I can only speak for Swissquote as I don’t know how the others operated, but for all our trading desks – which includes Forex, Equities, Derivatives, Fixed Income, and Cryptocurrencies – all our traders were on site for almost the whole year. In my opinion, some functions are too important to be operated remotely. Here in Switzerland we were lucky enough to have a very pragmatic type of lockdown, in the sense that companies could ask “essential” employees to work on site. Traders were among these. As we speak, Switzerland is considering a second lockdown, but here again, we expect that essential functions should again be exempted.
What has been the impact of geopolitical events?
Massive. Absolutely massive. Market-related events have been dwarfed by geopolitical events in 2020. And it went on and on till the end of the year with the US Election and all that followed until the President-elect’s inauguration. Volumes this early January are abnormally high compared to previous years, and it’s mainly linked to the situation in the US and the global pandemic.
What skillsets did traders need to navigate the markets this year?
I believe, that beyond the basics that every trader masters, it was all about decision-making. This means that a combination of in-depth knowledge of the market, of its technicalities, its various platforms, and having the ability to make the right decision at the right time were the ingredients for a successful year. Here at Swissquote we are really grateful to work with very knowledgeable and experienced trading teams. That definitely helped us.
Have you seen an increase in the demand for ESG backed strategies or trading opportunities?
Absolutely. We’ve been issuing certificates and investment baskets with our research team for quite a few years now and we clearly see the trend going upwards. We’ve offered investment opportunities in spaces such as Social Responsibility, Vegetarianism, Global Recycling, Rainbow Rights, Sustainable Energy, etc, but there is also a very interesting shift of demand towards investments into companies that have a real impact and effectiveness. Investors know how to make a difference between the trendy “Green washing” initiatives and the real “Do good” actions; the effective and quantifiable ones. That is why, for example, all the renewable energy related investment vehicles are in very high demand by our clients.
How do you see 2021 unfolding?
That’s a tricky one. Last year, I was asked the same question and I had answered: “Expect the unexpected” – I’m tempted to answer the same way! However, I really hope that the events of 2020 will soon be forgotten and that normal life, in all its aspects, will resume. The human being is a social animal, and not designed to be locked down. So fingers crossed, 2021 will be a better year for the people.
©Markets Media Europe 2021