Since its foundation in 2009 AxeTrading has been a pioneer during the adoption of electronic trading in fixed income. Having established a strong presence in the European market, AxeTrading is now growing its client base across Asia and the rest of the world, helping its clients to over-come the inherent fragmentation in the fixed income market.
AxeTrading, a London-headquartered fixed income trading technology firm, focuses on providing clients with pricing, execution and data workflow tools.
It provides connectivity to trading venues as well as offering data aggregation tools to give clients a single view of liquidity across both voice and electronic markets enabling them to make better informed trading decisions.
Over the past 12 months, AxeTrading has opened offices in Sydney and Singapore to continue to grow its client base in the region and capitalise on increased interest in electronic trading and its product suite.
Dinos Daborn, director and co-founder of AxeTrading, sees huge potential for tools that facilitate electronic trading across Asia.
“Fixed income Etrading is behind the curve in Asia but the market structure is changing rapidly and there is widespread appetite to adopt electronic trading and a growing understanding of the efficiencies it brings,” he says.
Daborn says that the profile of markets across Asia make them well suited to the liquidity discovery tools offered by AxeTrading.
“There isn’t one dominant market in the region, it is all very regional, and that fragmentation leads to the necessity to have technology to aggregate data and be more efficient.”
“As the Asian local bond markets go through a maturing phase, we have seen a need for our clients to look to market themselves internationally. AxeTrading has a number of solutions to help”, adds Kem Husain, Head of Asia Pacific Sales of AxeTrading.
“Another thing we see in Asia is the ambition of local exchanges. They are looking to grow their fixed income presence and have a greater dominance in their market than you see from exchanges in Europe.”
But while the local exchanges are seeking to centralise liquidity in local markets on their platforms, this does little to overcome the inherent fragmentation of numerous small markets.
Private banks and high net worth individuals active in the bond market in Asia are trading across multiple currencies in multiple jurisdictions and need the ability to centralise and aggregate trading flow and market data to make better trading decisions.
Daborn says there has been a lot of interest in the firm’s ability to work with local financial institutions to white label its technology and provide their clients with access to international bond markets through the financial institutions’ websites.
“A lot of private banks and high net worth individuals do not have access to fixed income trading platforms like Bloomberg and MarketAxess so AxeTrading’s technology allows financial institutions to leverage their existing infrastructure and offer clients a broader access,” he says.
“Local banks really understand the local market so are well positioned to take the market forward. We are seeing more and more interest from financial institutions across Asia and I expect that trend to continue.”
Daborn is bullish about the continued development of Etrading in fixed income across Asia. He points to initiatives such as the continuing development of HKEx’s fixed income platform Bond Connect as central to the evolution of the market.
Bond Connect, which connects the Chinese market with the international market in Hong Kong, opened last year and currently allows Northbound trading so international investors can invest in Chinese bond markets.
It is widely expected that the Southbound route will open up in the next 12-18 months, which will facilitate onshore Chinese investment in international bond markets. Daborn says that this will be “the major development in Asia’s fixed income market,” when it happens.
Elswehere, AxeTrading continues to go from strength to strength with continued growth in the US, where the firm is looking to open up an office, and across Europe.
Daborn says that interest in Europe is continuing to be driven by Mifid II, where the long term impact of the market is beginning to become apparent.
“One of the main developments has been the vast amount of data that is beginning to come out. How you use that data is a key driver of change in Europe and a key opportunity for us to partner with third party data analytics to provide tools that use the data to drive trading decisions,” he says.