Fixed income
Changes are imminent beneath the calm water
Kristian Karppi, MD, K&K Global Consulting
Yesterday’s news rapidly becomes outdated. As
everything that is discussed by the buy side and
sponsors at the Alpha Trader Forum fixed income
debates in Paris, Frankfurt and London is under the
Chatham House rule, we take care not to mention
anything that is not in the public domain.
The electronification of bond trading has evidently led to
technology improvements. Legacy vendors in this area
have been forced to respond to competitive pressure
delivering better solutions for the buy side. The buy side
empowerment has gained momentum and they are
now critically scrutinising whether to adapt new point
solutions. It is great to witness the evolution within the
areas of trade automation and primary issuance.
There is a need for a fixed income EMS for data
aggregation but the starting price point may be an
inhibitor. The buy side need to be cautious as not all EMS
vendors have been able to deliver what was promised
for fixed income as of yet.
Portfolio trading is an increasingly interesting
phenomenon where the buy side are interacting
directly with electronic market makers. The buy side
discussed the multiple reasons for wanting to trade a
large multi-ISIN block in one go with focus on the overall
performance.
Automation is also forcing performance analysis to the
next level and forward-thinking heads of trading are hiring