|By Business Wire||
|October 29, 2013 08:02 AM EDT||
Danger signs in the US corporate bond market are flashing like a lighthouse’s beacon and according to new TABB Group research, the market is searching for new alternatives to trade credit as low interest rates have driven credit issuance to all-time highs.
The challenge, according to Larry Tabb, CEO, and director of fixed income research Will Rhode, co-authors of a new research study, “US Corporate Bond Trading 2013: In Search of a New Market Structure,” is that the current OTC market structure revolves around dealer balance sheets and leverage, which today are under siege by regulators and are being scaled back by bank management. “This is pushing the traditional dealer-based, capital-intensive and voice-based market toward electronic channels. While the existing electronic players are active, well used and supported, many of the current structures revolve around existing capital-intensive business models. That leaves the credit market with unmet needs and significant challenges,” says Tabb.
After speaking in September with heads of trading of the largest buy-side fixed-income managers and global heads of credit, or heads of credit e-commerce, of the largest bond dealers, TABB Group learned there is uniformly strong demand for a new corporate bond market structure allowing diverse sources of liquidity to find one another as the end of Quantitative Easing (QE) nears. However, warns Rhode, “solving these issues will take investment, guts and breaking (or at least bending) established business models. Improving liquidity in 70,000 corporate bond issues (CUSIPs) is a Herculean task.”
Key findings from the study:
- 85% of buy-side and 83% of sell-side firms are interested in seeing an independent platform emerge to facilitate liquidity challenges, but there is no clear consensus on a business model and rules of play.
- The buy side would like to see a Central Limit Order Book (CLOB); dealers lean toward a Session-Based market.
- Dealers are worried about their ability to provide capital amidst new regulations such as Basel III, leverage ratios, stress testing and increased scrutiny of dealer funding through repo.
- Fixed-income mutual funds have absorbed an additional $1.35 trillion of fixed-income assets, In June 2013, when hints of a reversal of the US Federal Reserve’s backed up interest rates, mutual investors dumped $200 billion in bond funds in only a few weeks.
- Although a majority of buy-side firms are reluctant to take an ownership stake in a new bond platform, most (buy and sell side) agree that dealers must own a stake in a new platform for it to succeed.
- More than three-quarters of the buy-side said now is the time for an Alternative Trading System (ATS) to emerge to take market share away from the traditional OTC market dealers and existing electronic platform providers.
While the challenges are sufficient enough to foment change, the catalyst for action is not yet in sight. “Nonetheless,” says Tabb, “the time may be ripe for a new corporate bond trading platform (or trade protocol) to emerge to challenge the status quo.”
The 32-page study with 46 exhibits can be downloaded by TABB Group Research Alliance Fixed Income clients and pre-qualified media at http://www.tabbgroup.com/Login.aspx. For a copy of the Executive Summary or more information, visit www.tabbgroup.com. To purchase the report, write to [email protected].
About TABB Group
Based in New York and London, TABB is the only research and consulting firm focused exclusively on capital markets, based on the interview-based, “first-person knowledge” research methodology developed by Larry Tabb. For more information, visit www.tabbgroup.com. In 2010, TABB launched TabbFORUM, the online capital markets community for peer-to-peer opinion and analysis covering current industry issues, tracked daily by 18,000-plus professionals; in October, 2013, QuantFORUM, a new online channel for the quantitative investing community went live.
SYS-CON Events announced today that Linux Academy, the foremost online Linux and cloud training platform and community, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Linux Academy was founded on the belief that providing high-quality, in-depth training should be available at an affordable price. Industry leaders in quality training, provided services, and student certification passes, its goal is to c...
Feb. 23, 2017 04:15 AM EST Reads: 1,138
Data is the fuel that drives the machine learning algorithmic engines and ultimately provides the business value. In his session at 20th Cloud Expo, Ed Featherston, director/senior enterprise architect at Collaborative Consulting, will discuss the key considerations around quality, volume, timeliness, and pedigree that must be dealt with in order to properly fuel that engine.
Feb. 23, 2017 03:45 AM EST Reads: 3,748
With the proliferation of both SQL and NoSQL databases, organizations can now target specific fit-for-purpose database tools for their different application needs regarding scalability, ease of use, ACID support, etc. Platform as a Service offerings make this even easier now, enabling developers to roll out their own database infrastructure in minutes with minimal management overhead. However, this same amount of flexibility also comes with the challenges of picking the right tool, on the right ...
Feb. 23, 2017 03:45 AM EST Reads: 6,569
910Telecom exhibited at the 19th International Cloud Expo, which took place at the Santa Clara Convention Center in Santa Clara, CA, in November 2016. Housed in the classic Denver Gas & Electric Building, 910 15th St., 910Telecom is a carrier-neutral telecom hotel located in the heart of Denver. Adjacent to CenturyLink, AT&T, and Denver Main, 910Telecom offers connectivity to all major carriers, Internet service providers, Internet backbones and exchanges.
Feb. 23, 2017 03:00 AM EST Reads: 1,607
Cognitive Computing is becoming the foundation for a new generation of solutions that have the potential to transform business. Unlike traditional approaches to building solutions, a cognitive computing approach allows the data to help determine the way applications are designed. This contrasts with conventional software development that begins with defining logic based on the current way a business operates. In her session at 18th Cloud Expo, Judith S. Hurwitz, President and CEO of Hurwitz & ...
Feb. 23, 2017 03:00 AM EST Reads: 1,844
China Unicom exhibit at the 19th International Cloud Expo, which took place at the Santa Clara Convention Center in Santa Clara, CA, in November 2016. China United Network Communications Group Co. Ltd ("China Unicom") was officially established in 2009 on the basis of the merger of former China Netcom and former China Unicom. China Unicom mainly operates a full range of telecommunications services including mobile broadband (GSM, WCDMA, LTE FDD, TD-LTE), fixed-line broadband, ICT, data communica...
Feb. 23, 2017 01:15 AM EST Reads: 1,094
Zerto exhibited at SYS-CON's 18th International Cloud Expo®, which took place at the Javits Center in New York City, NY, in June 2016. Zerto is committed to keeping enterprise and cloud IT running 24/7 by providing innovative, simple, reliable and scalable business continuity software solutions. Through the Zerto Cloud Continuity Platform™, organizations can seamlessly move and protect virtualized workloads between public, private and hybrid clouds. The company’s flagship product, Zerto Virtual...
Feb. 23, 2017 12:45 AM EST Reads: 1,325
As businesses adopt functionalities in cloud computing, it’s imperative that IT operations consistently ensure cloud systems work correctly – all of the time, and to their best capabilities. In his session at @BigDataExpo, Bernd Harzog, CEO and founder of OpsDataStore, will present an industry answer to the common question, “Are you running IT operations as efficiently and as cost effectively as you need to?” He will expound on the industry issues he frequently came up against as an analyst, and...
Feb. 23, 2017 12:00 AM EST Reads: 1,695
All clouds are not equal. To succeed in a DevOps context, organizations should plan to develop/deploy apps across a choice of on-premise and public clouds simultaneously depending on the business needs. This is where the concept of the Lean Cloud comes in - resting on the idea that you often need to relocate your app modules over their life cycles for both innovation and operational efficiency in the cloud. In his session at @DevOpsSummit at19th Cloud Expo, Valentin (Val) Bercovici, CTO of Soli...
Feb. 22, 2017 10:45 PM EST Reads: 665
"We're bringing out a new application monitoring system to the DevOps space. It manages large enterprise applications that are distributed throughout a node in many enterprises and we manage them as one collective," explained Kevin Barnes, President of eCube Systems, in this SYS-CON.tv interview at DevOps at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Feb. 22, 2017 09:45 PM EST Reads: 6,711
SYS-CON Events announced today that CA Technologies has been named "Platinum Sponsor" of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, New York, and 21st International Cloud Expo, which will take place in November in Silicon Valley, California.
Feb. 22, 2017 08:45 PM EST Reads: 1,873
SYS-CON Events announced today that delaPlex will exhibit at SYS-CON's @CloudExpo, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. delaPlex pioneered Software Development as a Service (SDaaS), which provides scalable resources to build, test, and deploy software. It’s a fast and more reliable way to develop a new product or expand your in-house team.
Feb. 22, 2017 08:45 PM EST Reads: 1,405
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo 2016 in New York. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place June 6-8, 2017, at the Javits Center in New York City, New York, is co-located with 20th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry p...
Feb. 22, 2017 08:45 PM EST Reads: 1,338
Extreme Computing is the ability to leverage highly performant infrastructure and software to accelerate Big Data, machine learning, HPC, and Enterprise applications. High IOPS Storage, low-latency networks, in-memory databases, GPUs and other parallel accelerators are being used to achieve faster results and help businesses make better decisions. In his session at 18th Cloud Expo, Michael O'Neill, Strategic Business Development at NVIDIA, focused on some of the unique ways extreme computing is...
Feb. 22, 2017 07:45 PM EST Reads: 7,826
The explosion of new web/cloud/IoT-based applications and the data they generate are transforming our world right before our eyes. In this rush to adopt these new technologies, organizations are often ignoring fundamental questions concerning who owns the data and failing to ask for permission to conduct invasive surveillance of their customers. Organizations that are not transparent about how their systems gather data telemetry without offering shared data ownership risk product rejection, regu...
Feb. 22, 2017 07:30 PM EST Reads: 1,212