Big data touted as next key to unlock fixed income trading

LONDON, Jan 18 (IFR) – Data analytics firms could be one of the prime beneficiaries of poor liquidity in fixed-income markets, as investors look for new tools to help them trade bonds in meaningful size.

Electronic trading of corporate bonds is growing – fueled by the rise of platforms matching buyers and sellers without banks acting as intermediaries – but over 80% of the roughly US$6trn traded annually in the US is still matched and executed over the phone or via instant messenger, according to research by Greenwich Associates.

“While electronic trading growth in corporate bonds tends to make the headlines, improving the human-aided liquidity-seeking process is an increasingly huge part of the story,” said Kevin McPartland, head of research for market structure and technology at the firm, which polled around 2,000 US and European institutional fixed-income investors.

By Tom Porter