Despite the credit crisis, electronic trading in global fixed income markets continued to increase in 2007, according to an annual European survey by the Securities Industry and Financial Markets Association (Sifma).
The survey, conducted during December 2007 and January 2008, canvassed 147 buy-side investors, 15 sell-side firms and five trading platforms.
Sifma says 53% of buy-side respondents reported that they were trading more than 60% of their fixed income volumes electronically. This is compared to only 38% of respondents saying they traded above the same level in 2006.
However volume increase on the sell side was not as high as projected, with sell-side respondents reporting 34% electronic fixed income volume trading in 2007, compared to 31% in 2006.
Mark Austen, managing director of Sifma affiliate, the European Primary Dealers Association says the credit crisis seems to have had a minimal impact on e-trading fixed income volumes, but he warns that expectations of e-trading growth are not as robust for 2008 as in previous years.
Sifma says the annual survey also revealed that an overwhelming majority of buy-side respondents - 85% - expect to be using a single platform for all of their institution's wholesale electronic trading activity within the next two years.
The leading factors for the buy side in determining whether to trade a product electronically are streaming prices and market volatility, says Sifma. In choosing a platform, depth of liquidity is now deemed the most important factor. This contrasts with 2006, when platform choice was determined by price transparency and best execution.Download the document now 554.7 kb (PDF File)