A new generation of trading solutions allows buyside bond trading desks to create a new source of alpha by maximising their opportunities in an increasingly fast-moving electronic trading environment through the use of the surfeit of data in fixed income markets in 2019.
Prior to the onset of the financial crisis and the subsequent wave of resulting global re-regulation, the majority of bonds and swaps trading activity within small-to-medium-sized asset management firms, hedge funds and wealth management firms was a game of dependencies.
In 2018, from an asset management firm or long-only institutional investor perspective, the time to await change in the fixed income market has passed; not only has significant change occurred, but it continues to change at a rapid pace.
This report shows how key characteristics of the global cryptocurrencies trading landscape are now maturing to a level at which real-money institutional investors are becoming incentivised to actively place end-investor capital into the marketplace.
Within the asset management industry, the recent rise in pure passive investing, based on traditional cap-weighted indices, is set to slow down in the near-future as more investors seek to diversify their portfolios while earning cheap alpha returns at near-beta fees.
Gold-i CEO Tom Higgins recently claimed in Finance Magnates Magazine (“Cryptocurrency liquidity, past, present, future” article) that “the most challenging factor continues to remain the access to and quality of liquidity.”
The European Securities and Markets Authority’s (ESMA) May 2 announcement that 220 of the 71,000 corporate credit and government bonds traded in the EU during Q1 2018 were deemed liquid came as little surprise to any of the market’s participants, globally.
Willis Bruckermann, GreySpark Partners Analyst Consultant, examines how high- and low-touch trading have changed in the past decade, and some of the implications thereof for the future structure of the flow equities market.
Since the 1980s, the electronification of financial markets trading resulted in innovations in computer hardware and software design that frequently tested the limits of what the technology that is utilised by markets participants – specifically, asset managers, hedge funds, institutional investors and investment banks – in their every-day operations can achieve.
Despite recent signs that global equities market volatility is showing signs of life once again after a period of prolonged slumber, investment bank execution franchises should remain mindful of the long-term imperative to continue to reduce costs at the margins across the whole of the brokerage business.
When considering the potential impact that the EU’s General Data Protection Regulation (GDPR) could have on the entirety of the bloc’s corporate economic sector, look no further than the findings of an April 2017 Veritas survey in which 20% of the 900 respondents – characterised as “senior business decision makers” – expressed concern that, globally, non-compliance could put them out of business.
As the efficacy of long-established cost-savings and efficiency efforts dry up, financial institutions seeking to transform their business models are increasingly looking to automation technologies to support process workflow optimisation.