Markit Preps 'Second-Gen' Boat Data

Will Meldrum, managing director of the business, which will now be known as Markit Boat, confirms that the vendor plans to launch "second-generation products in the coming months."

Though Meldrum declines to specify what new products are in the pipeline, others speculate that Boat's data could have broader potential uses than originally envisaged, and that the vendor could easily create a series of equity indexes from the data, particularly with the know-how acquired via Markit's recent purchase of index data vendors International Index Company and CDS IndexCo (IMD, Nov. 19, 2007).

"If you look at what they are already doing in the derivatives space, you can see that Markit would be in a good position to develop index products on the back of Boat's equity data," says Chris Pickles, head of marketing for investment banking and global accounts at BT Global Financial Services.

With more market venues coming to market following the introduction of the EC's Markets in Financial Instruments Directive, new indexes could be needed to more accurately reflect the changing landscape. "There should be a market requirement for a consolidated index that includes any equity trade as a component, irrespective of whether the trade was on- or off-exchange," Pickles says.

"I really question how well the current indexes are keeping track with the fragmented picture, especially with all the market volatility at the moment," says PJ Di Giammarino, founder and chief executive of consultancy JWG-IT. Firms can no longer "rely on exchanges as a sole price benchmark," which may have knock-on effects in terms of calculating closing prices and determining market share statistics, Di Giammarino says.

Another source suggests that Markit might also look to create market share statistics using the Boat data, given that the vendor accounts for a significant percentage of trade reporting for the European equity market.

"We have around 25 percent market share of the entire equity markets in Europe in terms of value and around 60 to 70 percent of the over-the-counter space," Meldrum says. "[But] it's very hard to pinpoint the figures precisely, given that there's no central repository of reported data [for the entire equity market]," he adds.

Markit has managed Boat since it was selected as a commercial partner for the initiative last year (IMD, Jan. 29, 2007), and full ownership of the entity may free up Markit to take speedier management decisions and launch new products more quickly. Plus, the fact that management will not change following the acquisition should help ensure continuity for contributors, customers and data vendors, Meldrum says. "This is one of the reasons the acquisition makes sense. There are no great changes in the way we're going to do things or create products," he adds.