Algomi and Euronext team up to create European bond MTF

Bond technology specialist and stock exchange group announce long-term partnership to boost fixed income liquidity.

Algomi has struck a 10-year partnership deal with Euronext to launch a new trading facility for pan-European corporate bonds.

The deal takes the form a joint venture special purpose vehicle which will be capitalised by Euronext and utilise Algomi technology to improve liquidity in corporate bonds across Europe. The technology will be licenced to a new multilateral trading facility operated by Euronext.

Euronext said the majority of the global bond market value of $87 trillion is still traded by phone, resulting in opaque and fragmented markets.

“There is limited data on buyers and sellers which results in low liquidity. Investors in these markets continue to struggle to find the right trading counter-party at the right time. This unique solution will link Euronext, the banks and investors in a collaborative network which creates a centralised market place,” Euronext said in a statement.

Algomi already operates a bond trading network between asset managers and dealers, called Honeycomb.

Analysis of existing Honeycomb data suggests that 40% of less liquid indications on the platform could benefit from being matched through Euronext, Algomi added.

Stu Taylor, co-founder and CEO of Algomi, commented: “We are delighted to be working with such a significant market player as Euronext, who have already proven themselves to be highly nimble and forward thinking in this field. The long term relationship is evidence of the commitment by both sides to improving the European corporate bond market.”

Stéphane Boujnah, CEO of Euronext, added: “The creation of this platform will ultimately diversify Euronext’s offering, with further key synergies in technology and market data to be explored jointly with Algomi. This initiative, alongside our broader ambitions in FICC, fits with Euronext’s “Agility for Growth” strategy of capturing innovative opportunities arising from the market environment, accelerating growth through strategic partnerships, enhancing agility and strengthening its core offering to finance the real economy.”