FIIG - The Fixed Income Experts

News and Education

Liquidity in over the counter bond markets

by Henry Stewart | Jun 06, 2013

The Australian Financial Markets Association provides annual reports on the breadth and depth of both OTC and listed markets. The below table provides a summary of total turnover for the 2012 financial year, highlighting the relative liquidity provided by the ASX and OTC markets.

FY Annual Turnover ($Billions)

OTC non-government debt has almost half the turnover of all ASX securities, and over 100 times the turnover of ASX listed interest rate securities.

FIIG acts within this OTC market alongside domestic and international institutional counter parties who traditionally transact in $500,000 minimum parcels, allowing for liquidity in volume; intermediaries like FIIG provide further liquidity in parcel sizes down to $10,000 via our 5x$10,000 portfolios.

While FIIG represents only a small part of the entire OTC market, it alone provides comparable liquidity to the ASX.

Keeping in mind that the many listed interest rate securities are either hybrids or convertibles which have significant equity-like features, the following graph shows FIIG’s total monthly turnover to that of all ASX listed interest rate securities, and ASX listed interest rate securities excluding hybrids and convertibles.

Monthly Turnover: FIIG and ASX Interest Rate Securities

In the 12 months to February 2013, turnover for FIIG totalled $5.51 billion, which compares to the ASX’s total interest rate security turnover of $6.90 billion and turnover in interest rate securities excluding those with equity like features of $2.99 billion.

For full details of FIIG's ongoing liquidity reporting, FIIG provides a weekly transparency report which can be accessed at