Burgenstock Notes, Day 1
I’m here in picturesque Burgenstock for the 27th Annual International SFOA Bürgenstock Conference: The International Forum for Derivative Markets.
The opening panel was entitled ‘Financial Megatrends: how the new world of IT continues to reshaping markets’, and as background there was an excellent white paper (more on this in coming days) by Patrick Young and Steve Mitchell distributed with all the conference welcoming material. Here are my quick and dirty notes:
Burkhard P Varnholt (Credit Suisse)
- massive demographic change on a global scale w/ simultaneous technological change
connecting everyone
- three key investment themes:
- 1. quest for basics (infrastructure for developing and developed markets)
- 2. quest for enrichment - wealth vs health
- 3. rerating of emerging markets (trading at a discount due to ‘being in the
wrong index’)
More of his interesting ideas can be found in this presentation entitled “Innovative Investment Products for Private Banking.”
Lamon Rutten (Multi Commodity Exchange of India).
- second mover advantage: no legacy technology
- 250k trades per day, $40bn value per month, 9000 terminals, 3 yrs old,
500k+ participants
- end customers ‘trading from the computer in the back of the market stall or spice shop’
Thought his points were spot on and will definitely keen to learn more about the MCX.
Dan Gisler (Eurex)
- biggest threat (for ‘incumbents’) is a reluctance to change; instinct is to protect current franchise/business model (especially when enjoying current success.) Need to continually innovate and adapt…
John Foyle (euronext.liffe)
- in the future (due to internet technology changing how people access their financial affairs) individuals will increasing become their ‘own fund managers’
- data explosion
- many of new algorithmic traders are based in India and Asia
- regulators/regulation is a potential bottleneck (due to scale of data needing to be
processed and speed of changes in technology and market structure)
- IP/patent law is a big potential risk going forward (stifling innovation, slowing progress and adoption of new technologies)
