Consultants Celent predict that by the end of 2007, more than 60 percent of fixed income trading will occur electronically.
After three years of intense competition, bankruptcies and consolidations, the electronic fixed income market has stabilized and is poised for a new phase, they say.
In a new report, “E-Bond Trading 2004: Going Beyond Trade Execution,” Celent examines the growth of the US fixed income market as well as the key trends affecting the ongoing development of the electronic fixed income market. The report profiles five leading trading platforms in the US market: TradeWeb, MarketAxess, TheMuniCenter, eSpeed, and ICAP.
“The e-bond market is no longer just about trade execution,” says Sang Lee, manager of Celent’s securities and investments practice. “We expect to see increased efforts in creating a full-STP solution for the fixed income community.”
In 2000, the enormous market excitement was based on unrealistic, hyped-up expectation levels and a lot of vapourware, say the Celent consultants. They say that this time around, market optimism is based on realistic client expectations and tangible trade volume. “After a couple of years of uncertainty, it has become clear that the electronic fixed income market is here for the long haul and the real competition appears to be just beginning,” says Celent.