Tapping the accelerating trajectory of change in fixed income markets

Published on 19 July 2023

S&P Global Market Intelligence is developing predictive analytics in the primary issuance space for bonds, allowing predictive analysis – based on a market participant’s individual data and goals.

By combining the firm’s own wealth of data with the right tools to deliver insights and interoperate across services, Carl James, head of fixed income, global markets group and S&P Global Market Intelligence believes trading desks will be able to collapse certain workflows and processes, substantially increasing efficiency and effectiveness of the desk in the issuance space.

Transcript of interview:

Dan Barnes: Welcome to Trader TV at FILS – your insight into institutional trading. I’m Dan Barnes.

Joining me today is Carl James, global head of fixed income at S&P Global Market Intelligence. We’re going to be talking about how the firm’s fixed income offering is evolving.

Carl, welcome back to the show.

Carl James: Thank you very much. Good to be here again.

Dan Barnes: What’s your picture of the fixed income markets today? How does it look?

Carl James: We’re in a very exciting space. And I do see that the fixed income markets are going to go on this accelerated trajectory of innovation. There’s a number of themes that I think we’ve kind of been holding back a bit. We’ve looked across at equities and they’ve done some interesting things over the years. Fixed income, we’re going to T+1. We’ve seen some digital bonds being issued. S&P Global Market Intelligence are going to be right in the middle of that. We’re going to help drive that innovation in every way that we can.

Dan Barnes: And how will a fixed income trader see what S&P Global Market Intelligence is offering evolving?

Carl James: Increasingly, we’re listening to and engaging with our clients on our primary issuance platform, which is investor access. We’ve got 600 plus clients on the platform. We want to engage with them, plus the broader market.

We understand that primary issuance is a difficult workflow. Multiple systems, They’re dealing with multiple funds in a very complex market that sometimes can be quite volatile. We’re looking to make sure we are front and center of helping them reduce the complexity of the workflow. Now to do that, we’ve got to engage in partnerships, we’ve got to collaborate and we’ve got to invest in interoperability.

The other element will be an evolving set of analytics. We’ve started a project where we’re looking at predictive analysis within the primary issuance space. We have a huge bank of data going back years. Now what we’re able to do is look at data in a particular way and then overlay with the clients specific data, and then you have predictive analysis based on their specific circumstances. Now that to me is really powerful. And what we’d like to do is talk to both buy and sell side so that they can look at that and say, ‘Yep, interesting. But have you thought at this dimension or a different structure as well?’

If you link that with some interoperability, if you link that with collaboration with other market participants as well, that’s hugely powerful. Data is going to be a key differentiator. There’s no question of that. So what you have to do is just make sure that the data you’ve got gives you a unique view of the particular area that you’re looking to engage in and trading.

Dan Barnes: Very good. So what would actually change then for a buy-side trader?

Carl James: From a primary issuance perspective, we know that the buy-side have got optionality of how and where they execute that business. What S&P Global Market Intelligence are looking to do is to provide a functionality on our platform that draws people to it. We want to offer them the data analysis so they can make some interesting decisions off the back of that, both pre, during and post, which I think is an element of best execution, which hasn’t really been addressed in the primary space. I

want to be able to demonstrate to the buy-side that we’re offering a holistic place to execute that primary business that allows them to seamlessly push those orders through and collapse it down. It’s really just about making sure we understand the real nuances of each individual. So we need to engage with them more and more.

Dan Barnes: And if a buy-side firm wants to collaborate with S&P Global Market Intelligence on this, what should they do next?

Carl James: Just reach out to us. Whether they’re on our platform or not is kind of immaterial. What we want to do is engage with our clients and potential clients and really understand what it is they’re trying to figure out. Is it interoperability? Is it connectivity? Is it about the collection of data? Is it about threading all of those together?

We run a number of roundtables, so we invite people to come along and we just want them to discuss what it is that they are really dealing with and that they’re finding difficult for both primary and secondary. There’s a wealth of things that we’re looking to do within S&P. My role here is to look to make that happen and engage with our clients very closely.

Dan Barnes: That’s great. Carl, thank you very much.

Carl James: Thank you.

Dan Barnes: I’d like to thank Carl for his insights today, and, of course to you for watching. Don’t forget to catch up on Trader TV This Week at 6:45 am, UK time every Monday and go to our website TRADERTV.NET for our other shows.