Wall Street powerhouses Goldman Sachs Group and Morgan Stanley led the pack in Greenwich Associates ranking of the best firms to trade over-the-counter derivatives, driven by new customers flocking to the handful of dealers that have historically dominated the market.
The 2008 Global Commodities Research Study ranked derivatives brokers in four categories. Goldman Sachs and Morgan Stanley tied for first for best overall service quality, and Goldman Sachs followed by Morgan Stanley and Barclays Capital were the leading firms in both European and global OTC derivatives categories. But Morgan Stanley edged out Goldman Sachs as the leading firm in U.S. OTC derivatives. JPMorgan Chase, Citigroup and Societe Generale also ranked in the top five in one or more categories.
Because changes in commodity prices can have a dramatic impact on some companies P&L (profit and loss statements), companies are increasingly placing a strategic focus on hedging and are looking for proven expertise, Greenwich consultant Andrew Awad said in a statement accompanying the study. As a result, many are choosing to work with the derivatives dealers that have the most credibility and the largest franchises.