Corporate Bond E-Trading: Same Game, New Playing Field
(Greenwich Report, 28 Pages)
New research from Greenwich Associates and McKinsey & Company suggests that full-fledged e-trading in corporate bond markets will be slow to arrive (if at all)...
9 August 2013
United Kingdom, The Netherlands, Switzerland, Spain, Portugal, Nordic Countries, Italy, Ireland, Greece, Germany, France, Belgium, Credit Products, Emerging Market Products, E-Trading (Fixed Income), Government & Agency Products, Rates Products, Securitized Products, Fund Managers, Hedge Funds, Institutional Investors, Insurance Companies, Rating Agencies, Retail Aggregators, Securities Exchanges, Banks
Research from Greenwich Associates and McKinsey & Company suggests that full-fledged e-trading in corporate bond markets will be slow to arrive (if at all). A Spring 2013 study of 117 institutional corporate bond investors in the United States and Europe reveals:
• Until mid-spring 2013, the liquidity shortage, a spur for many of the new e-trading platforms, was not as bad as many had feared. Many investors, however, expect liquidity to deteriorate further.
• Few participants foresee a revolution in e-trading, while most expect multi-dealer RFQ platforms to continue to prevail.
• Buy-siders are generally reserved about other e-market models.
In the Spring of 2013, Greenwich Associates and McKinsey & Company collaborated on a research effort on the future of corporate bond e-trading. We conducted an online study of 117 buy-side portfolio managers, traders and analysts (35 from the United States and 82 from Europe). We also conducted in-person discussions with leading buy- and sell-side participants, including eight of the 10 largest dealers, as well as the operators of several major e-trading platforms.