Electronic trading is making inroads in the corporate bond market, with several exchanges competing for business, but participants at the ABS East conference don’t expect asset-backed securities or other kinds of structured finance to change hands online anytime soon.
“We don’t really have electronic trading” in securitization, said Bob Behal, co-head of ABS/CMBS in Vanguard Group’s Investments, speaking on a panel.
There’s a good reason for that.
The nature of structured products is very different from, say, corporate bonds, according to the panelists at the Information Management Network conference.
Investors in this space are keener to talk to dealers and analysts about transactions as opposed to simply making a trade based on readily accessible and easily digestible data, an approach better suited to corporate bonds.
Those weighing whether to buy or sell a structured deal, “want access to opinions,” said Will Zak, director at Barclays, adding that the vast array of data points that could impact pricing means they want guidance in “how to walk through a bond.”