Bond Managers ‘Nervous’ About Banks’ Role in Liquidity Projects – Investment Week
August 12, 2015 \
7 Comments
Fixed income managers agreed that any moves to boost liquidity are welcome, they fear the open information within these projects could leave markets vulnerable to price fluctuations. Full Article
Comments
Laura Dew needs to read Friday Newsletter! Is it me, or do others think that this may have been posted by http://www.theonion.com ? I feel like Jon Stewart when he picks a video clip of someone saying something crazy and just stares at the camera. The story covers Neptune, a new electronic bond trading platform that is designed to leverage technology and bank relationships. The quotes from the buy side have me twisting my head like a dog trying to figure our what his master is saying. “It is a great idea but the devil is in the detail. Money… Read more »
Things I learned from this article. Efforts to boost liquidity are welcomed by the buy side….BUT some buy siders won’t add liquidity to attract it because it might work against them. A buy sider would be “more likely” to support a platform with no sell side and hedge funds…BUT another buy sider says it would be very difficult to create a market without using banks…AND another points out that pure buy side to buy side platforms have never been successful Creating new credit platforms is quite refreshing…BUT regrettably they have not been successful. Schizophrenia, thy name is buy side. The… Read more »
Maybe I need to learn more about Neptune but my understanding is that it is not a trading platform at all (at least not yet) and that it is simply a messaging utility so that dealers can send their pricing, quotes, axes, etc… to one place and everyone and anyone can then receive the data via Neptune. Of course, the dealers would each be able to keep control as to which entities/venues are permissioned to receive their info but in the end, buy side consumers of this data, either directly or via a vendor, would then execute via phone, messaging… Read more »
Merlin – Well Stated! My understanding is that Neptune simply replicates the existing dealer to client work and, simply adds connectivity efficiencies.
Wow, I don’t have a huge amount to add to Merlin’s detailed analysis. The main things one has to understand when building a new platform addressing market structure problems are the following; (1) It cannot address all the problems- in other words it has to be adequate, not perfect (2) It has to be better than what presently exists, filling a need (3) It has to have flexible protocols that can evolve, (4) It has to be easy for all players to connect to (5) It has to add value. Adding value is the key. What players are most concerned… Read more »
This article is one of the weirdest (and that’s saying something) pieces I have read in a while. As per below Merlin is spot on but to answer some of the questions raised. -“Money managers like me are nervous about going into the system and announcing our intention to buy and sell.” Are we all sure that there is even such functionality in Neptune? Answer = No. In its current form it is Sell Side to Buy Side mirroring in a more cost effective, and higher quality format what is currently done today by sales sending spreadsheets, forwarding runs etc.… Read more »
Thank you Iceman for a few specifics on Neptune, the article certainly didn’t advance my understanding and it seems a few people quoted in the article don’t understand it either. Neptune has a an education challenge on its hands. Is it it just me, when I read the words ‘non profit’ and x banks, y buyside owners etc etc., I yawn and think this is going nowhere fast; too many conflicting interests and agendas, too tough to get decisions made, and most importantly no profits and unclear incentives. I guess that everyone ‘profits’ from better ‘liquidity’ IF it happens, but… Read more »
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