Credit Suisse First Boston has joined existing BondsInAsia financial partners BNP Paribas, Citigroup, Deutsche Bank and HSBC as an equal shareholder of the regional electronic trading platform for Asian fixed income securities.
BondsInAsia is expecting to launch the first of its local franchises later this year, starting with Hong Kong and Singapore and followed by a virtual franchise for the dealing of all G3 currency denominated debt from Asia. Franchises in other markets will follow after that.
The five financial partners have a stake in the BondsInAsia holding company and will also participate in each of the franchises on an equal basis with local dealer participants.
Negotiations with the local dealers and regulators, and testing among the shareholding banks is continuing and CEO Albert Cobetto says he is hopeful that a launch isn't too far away.
"Most of the questions from local dealers revolve around the technology – how it works and how they can integrate it with their existing set-up. It is a new delivery channel, so especially for the local and regional banks they are not as familiar with electronic trading platforms, even thought they might have sophisticated technology in other areas," he says.
Of the five shareholder banks CSFB has the least presence in the region's local currency debt markets, although it has a strong position in the Singapore and G3 markets. Charlie Chan, CSFB's managing director and head of emerging markets trading for Asia ex-Japan, says that the franchise model and the electronic trading platform might help the bank extend its reach.
"We do trade Thai debt, though we don't have a local presence. So unlike the likes of Citibank, our volume isn’t very high. But we're interested in using the electronic platform to help us there," he says. "Thailand isn't as transparent as Singapore. But if you can get most of the players on board an electronic platform and increase price transparency and execution speed, then you might get more foreign investors interested in trading."
"We're also interested in Korea where we do have an onshore presence and already trade quite high volumes. The electronic platform there should be useful as a liquidity driver and to get better execution and pricing."
BondsInAsia's main focus is on providing technology for secure and efficient trade execution, which in turn will facilitate increased access to liquidity and enhance the transparency and depth of Asian markets. Its multi-market model encompasses both dealer-to-client and dealer-to-dealer trading.
