Based on a focused expansion programme, Thomson Reuters boasts the largest market share among real-time news and analytics providers within the commodities markets. Its roll-out of proprietary Asia Oil and product Swaps Forward Curve – with its impressive data infrastructure and significantly improving price discovery mechanism – have been well-received across the region. Within the oil trading community, users have increased by 400% over the last two years, according to the firm.
Thomson Reuters offers its data across Elektron, the firm’s suite of data and trading propositions, which allows users to access a range of data sources including low-latency feeds for capital markets along with analytics, enterprise platforms and transactional connectivity for supporting trade workflows. Elektron’s real-time feeds have points of presence in Beijing, Hong Kong, Mumbai, Seoul, Shanghai, Singapore and Sydney.
To minimise the cost of accessing data and connectivity, Thomson Reuters also offers Elektron as a Service, which is designed to help clients handle large amounts of market data without having to build or manage infrastructure. Building the systems was not an easy process, admits Siva Balasupramaniam, manager, global oil price assessment, Thomson Reuters Oil Research.
“Moving [data] onto Elektron, and moving the key clients over was a lot of work,” he says. “We pushed that technology to a point where we moved onto DataScope Select (DSS), which allows data streaming. Consequently we stream data directly to the customers’ risk management systems so any human error is taken out of the process. DSS works with all central risk management systems.”
DSS offers users a data model and in addition to oil supports a variety of other asset classes, including equities, derivatives, funds, loans, foreign exchange, swaps and over-the-counter equity options. The system also supports a variety of data sets including corporate actions, reference data, entity data, evaluated pricing, news, estimates, analytics and technical indicators.
As a result, Thomson Reuters is able to support multi-asset trading for firms that deal with energy and commodities trading. The application programming interfaces that it uses are designed to help clients integrate data easily into their own systems, and access Thomson Reuters content in a more flexible and manageable way.
Oil is the first asset. If we can do that the rest will be a lot easier; they should fall into placeSiva Balasupramaniam, Thomson Reuters Oil Research
The first clients to want to use the firm’s Asia Oil and product Swaps Forward Curve and quality test the data it provided was Mitsubishi, says Balasupramaniam. The bank’s trading arm in Singapore were using it via their risk team and instigated quality checks for more than two years. Balasupramaniam believes that its integration within firms will change the way oil traders think about risk management.
“If everyone has clarity on where the mark-to-market price is, regardless of which region you are in, for all contracts, nobody is there extrapolating each data point hoping they have got it in line,” he says. “All the majors will know where the value is, it is streamed right into the system, they will calculate their trading value at risk along with other risk measures and they know for a fact that it will be what they want, because on our end we are using a Reuters Instrument Code format [a proprietary ticker-like code the firm uses to identify financial instruments and indexes] and any corrections will be streamed through as well.”
The firm has plans to deliver similar pricing models for all commodities, says Balasupramaniam. Through Thomson Reuters infrastructure, the firm will be able to stream every piece of data required by customers for their risk management procedures via mark-to-market and value calculation. Given the scale of Thomson Reuters’ existing operation and the capacity to reach so many firms across multiple sectors, the firm is bullish about its ability to build curves.
“Oil is the first asset. If we can do that the rest will be a lot easier; they should fall into place,” asserts Balasupramaniam. “It is a bigger play by the company, it will only expand and get better. So far it has gone according to plan, and there hasn’t been any push back. The quality of data is there, the technology is there and now, so we can stream our content. It has been a long road but what we have achieved speaks for itself.”