Singapore-based fintech BondEvalue aims to level the playing field in bond investing by giving average clients access to live prices. finews.asia speaks to founder Rahul Banarjee about how his firm is changing the face of bond trading.
Rahul Banarjee, what is your vision For BondEvalue?
I believe bonds are for everyone, and what I want is for the average investor to be able to access bonds. High-net-worth individuals allocate about one-third of their monies into bonds, but the average investor could not do so. That is what we are trying to change.
When I was growing up, the equity market was not very transparent, but it became transparent in the 1990s. The same happened with the forex markets. Now it's the bond market's turn.
Will these bondblox be available directly to retail investors end November during launch, or they are only available via their financial institutions /partners that BondEvalue works with, such as banks?
Like most exchanges, individual investors can access Bondblox only via their banks, brokers or Robo-advisors. The platform can be accessed from any country in the world. In Singapore, individuals need to qualify as Accredited Investors.
What is likely to be the type of fees for trading such fractions? Would they be similar to equities on exchanges?
There is currently no precedent since no one else has done this in the bond space. The type of fees would be very similar and familiar to equities; fees on trades and quarterly platform fees on holdings. Our value proposition to the investor is that he is substantially better-off with our offering. Fees would be very transparent and above board.
Are the initial trades based on primary issuance (i.e. directly from the companies) or secondary?
Initial trades will mainly be through existing secondary market bonds. The key challenge that most bonds face is that while it may have a robust primary issuance, liquidity tends to dry up in a secondary market. Our solution directly tackles liquidity issues by improving the accessibility and efficiency of trades and settlements.
Usually, bond managers are used to working with a more 'stable' asset class. With this kind of transparent pricing, how would this change their jobs?
In my view, we are highly complementary to their business. We bring increase trade volumes into the market and there will be greater demand for their services (asset management, ETF’s bond advisory, etc). The equity market is very transparent and yet employs a huge number of people.
Rahul Banarjee was a fixed income banker with expertise in Asian Capital markets. Prior to starting BondEvalue, he was the Global Head for International Corporates, Financial Market Sales at Standard Chartered Bank (SCB). His team was based across all the major SCB dealing rooms and covered the Fixed Income needs of large corporate clients. Over the course of his career, he has worked at Nomura Securities Singapore, Credit Suisse, and Citibank.
