January 29, 2010

Dow Jones Financial News Online

China Spend On Data Surges

Chinese asset managers have increased their data spend by 30% over the past six years, making an outlay of $340 million (€243 million) last year, indicative of the continuing growth in the country's financial sector.

 

The increased demand for market information by mainland China's investment community has been met, to a large extent, by local firms, according to a report released yesterday by research firm Burton-Taylor International Consulting.

 

Up to 60% of the demand for economic data, news and analysis by investment managers, research staff and front-office professionals has been provided by firms such as China Finance Online and a number of other local Chinese companies.  Thomson Reuters and Bloomberg are the largest international participants, making combined revenues of $116 million in the region last year.

 

The report also found that the average spend, per user, on market data products in the investment manager industry was $15,384 in China, compared to the global figure of $26,628 – highlighting the continued potential for growth in the region.

 

Douglas B Taylor, managing partner of Burton-Taylor, said: "Cumulative asset management fees generated on mainland China over the next decade could reach $513bn.  Growth of this magnitude draws substantial competition and will result in increasing demand for the information products and tools that enable market participants to both differentiate themselves and maximise return”.

 

The report comes amid an increasing international focus on the Chinese financial industry.

 

A survey published earlier this month revealed that IT spending by financial services in the Asia-Pacific region would grow faster than that of the US and Europe over the coming year.

 

The report, by research group Celent, forecast that IT spending in the Asia-Pacific region would increase at a rate of 5.1% during 2010, compared with expected growth levels of 2.2% for North American US firms and 4% for those in Europe.

 

The Burton-Taylor report also revealed that Chinese finance professionals are changing their information needs as their market evolves.

 

Taylor said: "We were not surprised to see that Portfolio Managers, for example, had shifted their primary criteria for selecting a data vendor away from attributes such as information update speed, and toward attributes such as data quality, vendor reputation and ease of use".

 

He continued: "Increasing sophistication among market participants is widening the breadth of data demanded".

by Tim Cave