Bloomberg L.P., one of the world’s leading providers of financial information, is actively exploring expansion opportunities in the region as part of its move to tap the growth of Asia in the years ahead.
“By definition we have to be in the markets where there is growth, so we have to be in China, India, Indonesia and Thailand” PETER T. GRAUER Chairman, Bloomberg L.P.
“They are very interested in having us put our R&D facilities in Singapore and this was raised by the country’s finance minister when I met him,” Bloomberg chairman Peter T. Grauer said during a recent visit to Thailand.
Mr Grauer did not say when such a move would take place but added that having an R&D presence would allow the firm to better respond to Asian growth and also tap the human talent pool of the region.
“Currently all our nearly 3,000 R&D staff sit in New York and I think it is a natural evolution over time as [Asia] is where the business growth is. Also gives us a broader pool of talent, of technology and human capital. It also better aligns us with the time zone,” he said.
Singapore is on par with Frankfurt in terms of size of Bloomberg’s presence. Its top four markets are New York followed by London, Hong Kong and Tokyo.
Mr Grauer said he felt comfortable with Singapore, noting that its economic agency is one of only a handful from the nearly 170 countries in which Bloomberg has a presence that calls on him even in New York to consult on issues.
Asia currently accounts for about 17-18% of the 315,000 Bloomberg terminals installed across the world, but the number is expected to reach 33% in the next few years with the rise of the region’s economic power.
Across the world, prevailing economic weakness has slowed terminal expansion substantially, but in Singapore and Asia it is the opposite.
“Sales in Singapore are up 4%. In Thailand, Malaysia, Indonesia and the Philippines they are up 11%. This is good solid growth, but then you have to take into consideration that the base is smaller,” he said.
Singapore’s economy is not as strong as it was in the past, while Indonesia is witnessing strong interest thanks to the country’s robust growth prospects.
“Our view of the Asean countries over the years is certainly very robust and an area where Bloomberg would dedicate its resources to enhance our position and also help the growth of the capital markets in the region as well,” said Mr Grauer.
“By definition we have to be in the markets where there is growth, so we have to be in China, India, Indonesia and Thailand. Myanmar is a long way off but we want to be there. We are in Vietnam.”
Apart from Asia, Bloomberg is expanding its footprint in Africa, where Mr Grauer spent much of May this talking to customers and governments.
“We feel that the real growth opportunities will come from the emerging markets,” he said.
He added that Bloomberg was now focusing on expanding its market share in areas where the market was dominated by its competitors such as Thomson Reuters in foreign-exchange dealing and commodities.
“We decided five or six years ago that it was important for our customers to have more than one vendor and that is why we have been very aggressive in building our capabilities on the data and analytic perspective,” he said.
In October this year, he said, the firm began trials of its instant dealing platform, which is directly competitive with Reuters’ forex dealing platform. The advantage of the Bloomberg system, he says, is that it is integrated into the Bloomberg terminal and available to customers at no additional cost other than the subscription price.
“Today we transact about $60-70 billion which is not a big deal in a $1-trillion market that is traded, but it shows our big push toward this business over the past few years. We have great aspirations but we will look at allocations for budget to grow into 2013,” he added.
With the growth of financial products in Asia expected to be exponential, the region would be a major contributor to the rise of demand for Bloomberg products.
“I think that over seven to 10 years’ time, the mix of 44, 39 and 17 percent (US, EU and Asia) will ultimately change to one third each,” he said.
Asked what the markets would look like in the near future, Mr Grauer said that data analysed over the past two decades showed Bloomberg’s growth had been in tandem with the growth of the financial products market.
“If you go back and look at 2010 there were $197 trillion worth of financial instruments in circulation. A report from McKinsey states that by 2020 there will be $367 trillion worth of these instruments,” he said, adding that this was the kind of growth the market would experience in the years ahead.