April 19, 2010

Dow Jones Financial News Online

Bloomberg Goes Head to Head with Reuters in Global Debt Markets

 

Bloomberg and Thomson Reuters, two of the largest news organisations, differ significantly in their coverage of global debt markets, with Bloomberg offering a more focused service, according to a recent study.

 

Research published last week, by US-based advisory firm Burton-Taylor International Consulting, found that Bloomberg offered “a generally more tightly focused volume of fixed-income content across a wider number of fixed-income instruments”.

 

The study also found that the news services of the two companies differed significantly in terms of focus and in the ways in which events were reported.

While Bloomberg news is concentrated on government debt, followed by corporate and emerging market debt, Thomson Reuters places a greater emphasis on emerging market debt, followed by government and corporate debt instruments.

Additionally, more than half of Bloomberg’s debt news items was in the form of headline-only alerts, while this method only accounted for about 35% of Reuters’ daily debt news output.

The two news organisations jointly account for more than 60% of the spending on global financial information, which totaled $23bn (€17bn) during 2009, according to Burton-Taylor.

The total spend on fixed-income market data was $3.7bn, the third most lucrative, behind investment management and equity sales and trading news.  This amount was down only 3.51% on the previous year.

Revenues from fixed income have helped to prop up profits of investment banks over the past 12 months.

Last week, JP Morgan reported that revenues from its fixed-income division for the first quarter of this year were up 12% on the same period last year, at $5.5bn.  In comparison, revenues from its equities team had come down by close to a third, at $1.5bn, over the same time period.

The Burton-Taylor study suggested that it was Bloomberg that had benefited most from this sustained demand, collecting more than 50% of revenues generated in the sector.  In comparison, Thomson Reuters took 15% of revenues, in spite of the fact that it delivered an average of two more fixed-income related commentaries per day than Bloomberg.

From a geographical perspective, the study found that just over a third of Bloomberg’s news was coded as relevant to the US market, compared to nearly half of Thomson Reuters’ items.

In terms of government debt, Bloomberg gave a much greater focus to markets such as Japan, China and India, and in its corporate debt news it gave “dramatically more content relevant to a wider range of countries”, including those in Europe and Latin America.

However, Thomson Reuters gave greater coverage to debt derivatives markets, with volumes of news items double those produced by Bloomberg.

A spokeswoman for Thomson Reuters suggested that not all of the company’s products were covered in the survey, adding that news items were given to users depending on their preferences.

She said: “In addition to its core markets news offering, Reuters offers specialist news services such as IFR (IFR Markets) and LPC (Loan Pricing Corporation) that have not been included in the study.”

She continued: “Reuters codes to the asset people are interested in and then to the asset class.  We may not necessarily code down to the actual instrument, allowing people who are searching for and investing in a particular instrument to find what they need.  We try to present our stories in a way that can be easily adapted to our clients’ workflow rather than presenting an artificial metric just to measure volume.”

Bloomberg declined to comment.

by Tim Cave