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The Swiss bond trading report 2018: Market evolutions and an outside-in view on Swiss investors

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Autor: Brian Mattmann

A variety of transformative forces has re-shaped the structure of bond markets in the last two decades. Regulatory initiatives, a changing policy environment and the emergence of technological innovations were responsible for this change in the market organisation. A major shift has started before the turn of the century with the growing implementation of electronic bond trading platforms and the subsequent rise of electronic trading. As a result, the volumes traded on electronic trading platforms have increased; the share of electronic trading has raised. Today, the number of available electronic trading platforms is vast: We have detected 33 different trading venues that are currently operationally active. The majority of these platforms allow for all-to-all trading (=14 platforms), 11 platforms connect dealers with investors and 9 electronic trading platforms are inter-dealer venues connecting sell-side firms. One platform is available that enables (exclusively) client-to-client trades.

Today, electronic bond trading is mature and the interconnection between market participants is progressing. As a result, electronic trading has significantly changed the structure of bond markets and it is evident that the market will never be the same as it was in the turn of the century. These developments create opportunities for bond trading and allow market participants to interact and trade bonds in a way they never have before (see figure below).


Figure: The introduction of electronic trading platforms and the increasing level of interconnectivity
(A2AP: All-to-all platform; C2CP: Client-to-client platform; D2DP: Dealer-to-dealer platform; MDP: Multi-dealer platform; SDP: Single-dealer platform; → Price-taker; ← Price-maker)

In this evolving trading environment, we have asked the question where bond trading is heading to in the future? If electronic trading was the first stage of the bond market’s evolution, is big data, market intelligence and smart information networks the next phase in the market’s development? Moreover, what is the stance of Swiss market players in this evolving trading environment? In this context we have conducted a survey among 115 Swiss market participants (e.g. banks, securities dealers, assets manager) aiming to increase our understanding of how local market players are trading bonds: How does their trading infrastructure look like, how advanced are they in adopting technological innovations, i.e. electronic trading platforms, and how do they execute bond-orders nowadays?

We deliver answers on these questions in the «Swiss bond trading report 2018: Market evolutions and an outside-in view on Swiss investors». We present the report on April 11th at 7.00 pm at the Saxo Trading Lounge in Zurich. The event is free of charge. A max. of 40 places are available. Register now!

Language: German/English

Agenda:

Introduction
• Prof. Dr. Thomas Ankenbrand, Head CC Investments, Lucerne School of Business, Institute of Financial Services Zug IFZ
• Dr. Patrick Hunger, CEO, Saxo Bank AG

Presentation of the «Swiss bond trading report 2018»
• Brian Mattmann, Senior Research Associate, Lucerne School of Business, Institute of Financial Services Zug IFZ

Practical view from a provider of an electronic multi-dealer platform
• Simon Fasdal, Head of Fixed Income, Saxo Bank

Apéro & networking

Our research in that field is kindly supported by Diem Client Partner AG and Saxo Bank (Schweiz) AG.

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