TP Icap Preps African Data Package

Interdealer broker TP Icap is about to release a new dataset of over-the-counter price data for the African market. The offering will cover the foreign exchange, fixed income and interest rate markets. The move is aimed at providing a reliable source of pricing for emerging markets traders seeking price discovery, investment support, and diversification in the region.

The dataset, dubbed Icap Africa Package, covers Botswana, Ghana, Kenya, Mauritius, Nigeria, South Africa, Tanzania, Uganda, and Zambia, and is sourced from trades executed by TP Icap’s local broking desk in South Africa.

According to data from the World Bank, despite having prior high-growth periods curtailed by the 2011-2012 European debt crisis, capital inflows—both direct and portfolio investment—are growing steadily again, says Jonathan Cooper, global head of sales for TP Icap’s Data & Analytics business.

“We see investors looking at emerging markets, and…our global customer base is asking us to help them understand the opportunity in these markets. It might be an existing customer who wants to mark to market with this dataset; it might be a regional bank in Africa using it to support their daily business; or it might be a hedge fund looking at macro factors and how to utilize them,” he says. “If you’re an emerging markets trader in London trying to mark your book, you need trustworthy data that meets your responsibilities. You may be trading a dozen core markets that are liquid, and other data sources [on those markets] may be unknown to you, whereas you already have a trusted relationship with us, and because we’re a regulated entity, it means we can provide high-quality data…in a format that you can ingest, and have confidence using that price in your workflow.”

Cooper says the broker has conducted a market consultation with local firms who are already using the data, and have been engaged in the design and production process over the past six to eight weeks. Some of the pricing already existed in smaller data packages, so the broker didn’t have to start from scratch, but rather focused on connectivity to capture and distribute the data, speeding time to market.

Subscribers—who do not need to be brokerage clients of TP Icap to purchase the package—can access the data on screen, via FTP download, FIX interface, or raw data feed direct from the broker, or via around 200 different options from data aggregators.

“It depends on who the customer is, where they are, and how they want to consume it,” Cooper says, adding that as clients increasingly adopt cloud services, the broker will also start making data available in the cloud.

The cost of the data will depend on how clients access it. For example, an existing enterprise client may already have rights to use the data, whereas a new customer that just wants to view data on-screen may pay in the region of $200 per month, Cooper says. “We can tailor the service to meet customers’ needs,” he adds.

Cooper says the dataset may grow in future, depending on how demand—and the evolution of the underlying markets themselves—increases.

“The vast majority of African countries have no classification, many are classified as frontier markets, and others are classified as emerging, but none are classified as advanced. So we have tried to prioritize the key markets. As a first step of client engagement, we now have that data to support customers. The next step will be whether there are other markets or datasets that we could add to support that price discovery process,” he says. “Clearly if there is interest from customers to expand the package over time, that’s something we would respond to—for example, expanding a dataset or adding asset classes if there is demand for that.

“In 24 months’ time, this package could look very different, depending on that customer engagement.”