EDI Expands African Economic Database with Beta Client Feedback, Preps Options Corporate Actions Data

EDI chief executive Jonathan Bloch says AFED─which the vendor unveiled in May─is nearing the end of a three-month beta testing period with around a dozen clients that are providing feedback on the service, having originally developed it at the suggestion of an emerging markets trading desk at a major investment bank in South Africa that was seeing a lot of interest in African bonds, but found it hard to obtain reliable and up-to-date macroeconomic data.

AFED provides financial and economic data for 54 African countries and five territories, covering more than 15,000 key indicators─including deposit rates, GDP growth, investment and debt figures, and agricultural production or inflation─sourced from central banks and international organizations such as the International Monetary Fund and the World Bank. The service has already been in development for three years and has involved 60 staff working on it, including an office in Morocco to provide local-language data sourcing and support services for the project.

As a result of the ongoing feedback from beta clients, Bloch says EDI is "constantly updating" the web access to AFED to make it easier to use. For example, the vendor has grouped exchange rates by region rather than alphabetically to make finding currencies more intuitive, and has grouped interest rate products into product categories, rather than simply a long, "overwhelming" list of all products. In addition, AFED now allows users to save searches in their profile to quickly retrieve them to run the same search again, or to run a similar search by quickly changing the criteria─such as changing the date range or country-to ensure clients can access data quickly and easily. Other enhancements planned for future releases in response to client feedback include the ability to plot multiple indicators for the same country alongside each other on the same chart for comparison, similar to how the vendor already allows direct comparison of the same indicators across multiple countries.

However, Bloch estimates it will be a further two years before the service is fully complete, as the vendor aims for the service to ultimately provide 100 million records─compared to 11 million already covered─including trade association, trades union and think-tank information in addition to its core macroeconomic coverage.

"It's a long process to code everything, even given that we are using software techniques to automate and speed up the process," he says, adding that once the product and processes are in place, it "opens us up to doing this on other continents where data is not readily available─but that's a question of cost and constraints. It's a very expensive exercise."

In addition, the service may also open up EDI to new audiences outside its typical investment bank audience that would use it to identify investment opportunities, including government departments, consultancies and multinational companies that could use it to create reports and studies.

EDI Eyes ETD
The vendor's new pricing and corporate actions service, dubbed Exchange Traded Derivatives (ETD), will provide end-of-day pricing─including open/close and high/low prices, open interest, number of trades, and traded value and volume─as well as reference data and over 30 types of corporate actions for listed futures and options contracts worldwide on equity, exchange-traded fund, index, bond or interest-rate underlying instrument.

Users will be able to subscribe to the pricing, reference data and corporate actions modules as standalone products or as a bundled service in their chosen standard format, but Bloch says the main value of the service will be its ability to automatically apply corporate actions on an underlying asset to price that asset's derivative, which asset managers' back-office staff could use to value their holdings and adjust values to account for the impact of corporate actions on their portfolios─such as adjusting an option price to accurately reflect a stock split.

Bloch says EDI has been working on the new service for six months already, and plans to launch it within the next six months, adding that he hopes the service will expose EDI to a new audience among back-office staff at derivatives trading firms, in addition to those at firms primarily operating in the equities and fixed income markets.

However, the main challenge in creating the new service has been that standardized symbology is less common in derivatives markets, where exchanges may still use proprietary fields and naming conventions, as it is in cash markets.

"You have to talk to the exchanges, do detailed analysis... and create your own mapping─that's a lot of work," he says, adding that performing this on a central basis rather than firms attempting to do it in-house individually could be a competitive advantage for the vendor and user firms themselves. "Many clients are saying that they can't get corporate actions on the underlying─it's all manual at the moment: they get PDFs from exchanges."