The hurdles race - taking fixed income trading to the next level
directly with electronic market makers for certain types of
flow.
Bond trading counterparties
We had an interesting debate and researched in depth
about the preferred counterparties for Emerging Markets
and High Yield in London, Paris and Frankfurt. There
are still development opportunities in how banks are
advertising emerging markets flow electronically on
platforms. The buyside have identified that the lack of
advertised EM flow electronically is partially due to internal
sales recognition issues where the EM sales person in the
specific country may not get recognised for their efforts if
the trade is executed on a platform.
Reviewing the concentration of preferred counterparties
for various types of trades in the bond market, some major
brokers are increasingly successful in smaller electronic
enquiries due to their investments in algorithmic quoting.
A few buy-side firms have also started trading bonds
10
Trading technologies
There are still growth opportunities for the buyside to
leverage and trust all-to-all trading to access buy-side
inventory. The buyside have now adopted the use of new
types technologies and, based on discussions with the
buyside, K&KGC is revising our research methodology to
reflect the changes.
Some firms are still holding off while others are taking a
step to implement various auto execution tools for low
touch bond trading. The top three dominant bond trading
venues offer, or are planning to launch, solutions based
on the auto execution protocol but some forward thinking
www.buysideintel.com
Winter 2018