The market may soon see the much-anticipated trading platform for synthetic European CMBS, said Nathan Kirk, director of product development at Markit Group, which is one of the dealers working on the new index.
The new platform ECMBX will be modeled after the U.S. CMBX platform that CDS IndexCo and Markit rolled out last year. "Because of the demand for paper in the European market, bidders' allocations are often revised down. The launch of a liquid synthetic index should help the market by satisfying this demand synthetically, and it's certain to generate significant volumes in these synthetic products," Kirk said. "The index will also allow investors to short the market very easily, which is something that can't easily be done at the moment."