Fixed Income special report
Click here to download the PDF
The Name's Bond...
While Ian Fleming's fictional spy James Bond has remained a constant, the actors portraying him on screen have changed over the years, from Sean Connery to Daniel Craig. Similarly, in the world of fixed income, we refer loosely to "bonds" as an asset class, comprising assets that vary considerably, from rock-solid government and municipal bonds to various asset-backed securities.
And while we generalize about the "credit crunch" stemming from fixed income markets, in an age when one can securitize pretty much anything, it's the quality of the underlying that contributes to the value of each contract. For example, a contract comprising mortgages on over-valued properties sold to people who can't afford to pay off the loan stands a better chance of defaulting than a blue-chip multinational or a government institution.
Though there are strict rules about the information a dealer must disclose when selling a security, the key to any decision to buy or sell a bond-especially those that are less liquid or traded completely over-the-counter, rather than on exchange-like multi-dealer platforms-is each counterparty having detailed data and robust analytics on the contract itself, its underlying, and any data inputs used to value both. The buy side is now increasingly demanding this data from vendors and dealers, and is forcing firms to justify and defend their valuations.
For example, according to Lee Sanders of AXA Investment Managers, investors and traders are looking more closely at potential investments-even down to the underlying terms and conditions-and working harder to determine the "true value" of fixed income assets.
Also in this report, Damian Burleigh of Standard & Poor's describes some of the ways that vendors are responding to these needs, and the products being brought to market to provide deeper analysis, while Christine Sheeka of MTS Data outlines how firms are seeking new ways to derive more value from existing datasets.
Trading volumes are rising again, as is investor confidence in fixed income, with both the London Stock Exchange and Singapore Exchange launching new retail bond markets this year. But with the threat of over-extension into a double-dip recession, only verifiable data and solid business practices will ensure this confidence is well-founded, and not the kind of swagger seen in second-rate spy movies.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
More on Data Management
Hub to lay off 20% of staff, sources say
Hub’s CEO says this is simply a case of a startup trying to stay nimble and efficient; others say it points to deeper issues.
TS Imagine integrates LTX’s pre-trade analytics tool
Users of the fixed-income EMS will now have access to LTX’s Liquidity Cloud tool, which provides a pre-trade score for the likelihood of trading success.
After contentious Opra upgrades, vendors brace for a faster future
Upgrades to the datafeed widely used to gauge the current market price for options contracts went into effect in February after three separate delays, which market participants say were caused by persistent bandwidth issues at some important recipients.
The IMD Wrap: No more turf wars, or why CDOs should heed the Voice of the CTO
Max reviews how our recent Voice of the CTO series has implications for those beyond a firm’s technology function, and how communication and collaboration between tech, data, and leadership will deliver better results.
Dark horse: Deutsche Börse building dark pool
New functionality allowing exchange members to execute sweep trades comes hot on the heels of European rival Euronext launching its own dark pool.
Man Group’s proprietary data platform is a timesaver for quants
The investment firm’s head of data delves into its alt data strategy and use of AI tools to boost quant efficiency.
Waters Wrap: The tough climb for startups
Anthony speaks with two seasoned technologists to better understand why startups have such a tough time getting banks and asset managers to sign on the dotted line.
As crypto ETFs become reality, benchmark providers take center stage
The SEC’s approval of the first spot bitcoin ETFs will expose a growing number of traditional market participants to the maturing world of crypto data, a moment that some—such as CF Benchmarks, BlackRock’s benchmark provider—have been eagerly awaiting.
Most read
- Women in Technology & Data Awards 2024: All the winners and why they won
- Witad Awards 2024: Above and beyond award (vendor)—Susan Bennett, Tradeweb
- Dark horse: Deutsche Börse building dark pool