Yesterday’s news rapidly becomes outdated.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 quants and innovate custom analytic solutions to meet their automation needs.
K&KGC assisted the buy side at each regional ATF meeting in May, with aggregating their detailed consolidated wish list and priority of features for future fixed income TCA/analytic solutions.
There were more in-depth discussions on the ever-important details of which elements the fixed income dealing desk should contribute within the investment process. A major proportion of the value add of the trader incurs in the interaction with the investment team prior to the order. If you would like to learn more, don’t forget to attend the next ATF fixed income meetings in the autumn.
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