Electronic bond trading
Edited: Peter Lee
| Bond market fingers on the button |
One year after the introduction of the single currency and the birth of the unified market, competition to provide Europe with an electronic platform to trade government bonds has gathered pace. This year could be crucial to establish which system will become dominant in the near future.
At the moment, the hot favourite is EuroMTS. In operation since April, this platform is based on the 10-year-long successful experience of the Italian Mercato Telematico dei titoli di Stato (MTS) on the domestic market and has grown impressively over the past eight months. "Our market share is now approximately 25%. The remaining 75% is still largely dominated by brokers and the over-the-counter market," says Gianluca Garbi, managing director at EuroMTS. The figures are the more impressive because the percentage is calculated on all transactions, including the smaller ones that a wholesale system such as EuroMTS will never be able to trade.
In the past few months, EuroMTS has outpaced all other contenders. Xetra, a system owned by Deutsche Börse to trade cash bonds and other securities, has been struggling to reach satisfactory volumes in fixed income.