Trading tech spending to rise, despite crunch

Trading tech spending to rise, despite crunch

The latest dealing room survey from Kimsey Consulting forecasts that around 12,000 trading positions will be cut around the world by 2011, but expenditure on trading technology is set to rise globally by 4.3% over the same period.

The global market for trading technology currently consists of more than 65,000 firms and more than half a million trading positions, worth an estimated US$70.5 billion in 2008.

But Kimsey says the continuing fall-out from the US sub-prime mortgage market and collapse of the credit markets are key factors driving change in the global market for trading technology, particularly in North America and Western European where markets are forecast to have 20,000 fewer trading positions by 2011.

Kimsey says the extent of the forecast reduction would be significantly larger were it not for the expansion of financial, commodities and energy trading sectors in regions such as Eastern Europe, the Middle East and Asia Pacific.

Report author Stephen Kimsey says the analysis "highlights the significant global variations that exist in relation to size, structure, value and the rate of change for the market for trading technology".

"In an increasingly competitive and global market, technology providers need to understand not just their existing markets, but increasingly where future opportunity will exist," he adds.

Despite the fall in the number of trading positions, Kimsey says greater reliance on technology and "increasing sophistication" of systems will drive an increase in IT spending globally by 4.3% through to 2011. However growth in IT spending in the US - the world's largest market - is expected to be lower at around 2.5%.

The value of the trading information sector, price data, news, is forecast be worth $16.3 billion by 2011, a nine per cent rise. The trading applications sector is expected to grow at a more modest three per cent and will be worth $47 billion by 2011.

A recent report from the Centre for Economics and Business Research (CEBR) warned as many as 20,000 City jobs will be culled over the next two years as a result of the global credit crisis.

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