December 8, 2008
Inside Market Data
'08 Data Spend Flat, Driven by Asia, EMEA
Firms worldwide will spend $23 billion on financial data in 2008-the same as in 2007-with a drop in outlay in the Americas but an increase in EMEA and Asia, according to research released by Burton-Taylor International Consulting.
Developing markets saw the greatest increase as
growing markets created demand for data, says
Douglas B Taylor, managing partner at
Burton-Taylor. Asia is seeing the most growth,
with an estimated 20.3 percent increase to $3.27
billion driven by the growing Chinese and Indian
markets, compared with $2.72 billion in 2007.
The research projects that spend in EMEA will rise by 6.8 percent to $9.11 billion, with most of the growth occurring in the Middle East. Spend in the Americas is projected to be $10.63 billion this year-9.6 percent less than in 2007. Though spend in Latin American countries actually increased, this was more than offset by the decrease in spend by US-based firms.
The most drastic change occurred in investment banking, where spend fell by 37.5 percent to $1.01 billion, even with the full impact of bankruptcies and restructuring yet to bite, and Taylor says he expects spend to continue to drop in 2009.
However, decision-making tools will still be needed to support firms' deal-making activities, he says, while regulatory changes may also create a need for information that firms previously did not need to understand or analyze, which could represent a growth opportunity for data vendors.
Fixed income and foreign exchange sales and trading groups shelled out $6.47 billion and remain the biggest spenders across every region, with FX trading driven by the recent weakness of the US dollar, Taylor says, though both markets are now leveling off following the credit market collapse. If not for the credit crisis, data spend might have seen double-digit growth from fixed-income businesses, Taylor says.
Data spend grew 5 percent to $5.12 billion among investment managers, which account for the second-largest segment of spend in the Americas and Asia, and which has experienced steady growth over the past couple years because of growing assets under management, leading to more fees and higher revenues-which Taylor says firms will need to reinvest in the best tools to surpass their rivals in this highly competitive market.
The greatest increase in data spend for 2008 came from the corporate sector- including treasury and investor relations- which spent 10 percent more than in 2007, partly as a result of regulatory changes requiring firms to increase their monitoring of messaging functions, Taylor says.
Taylor says it is still too early to determine the impact of the Thomson Reuters merger. The combined vendor now has 34 percent market share followed by Bloomberg at 24 percent, compared to 23 percent for Reuters, 22 percent for Bloomberg and 9 percent for Thomson last year. Taylor says he is waiting to see which vendor will break out among the other providers and show the necessary commitment to quality real-time and historical data on a sustainable basis to fill the third slot in the new "big three."
Burton-Taylor will release the final 2008 figures-including a full market share breakdown of data vendors and a forecast for 2009-in January or February.
by Vicki Chan
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April 10, 2013
Public Relations Information & Software Global
Share & Segment Sizing 2013
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