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Avaloq the Swiss Wealth Management Solution provider opens office in Australia

The Avaloq Group, the international reference for integrated and comprehensive banking solutions, is pleased to announce the opening of its first branch office in Australia.

As part of its continuous internationalisation strategy and aim to extend its presence in the most demanding financial markets globally, Avaloq has opened an office in Australia end of last year. The expansion to Australia – a new continent for Avaloq – comes after the company successfully established local offices in various regions in recent years.

Avaloq signed its first customer on the Australian continent – one of the reasons why the company decided to further extend its international presence and open a branch in Sydney. The Australian market bears a great potential for wealth management platforms such as the Avaloq Banking System. The fully integrated solution offers the entire field of investment products and additionally covers local tax and superannuation requirements. Combined with a team of experts, equipped with substantial know-how and experience regarding the Australian financial market, Avaloq significantly improves its local position.

“Opening an office in Australia is yet another important step in our internationalisation strategy and an additional milestone in Avaloq’s remarkable company history. Building up a local presence in the most demanding financial centres worldwide ensures that we are close to the markets and companies we work with. This allows us to cater towards our client’s needs and requirements without having to work around different time zones”, says a delighted Francisco Fernandez, CEO Avaloq. “The Australian market has immense potential, with demand for wealth management platforms increasing. Being present in Australia is the logical move for the company”, Fernandez continues.

The new Avaloq branch in Australia will significantly profit from the vast experience of the regional headquarters in Singapore, which was established in 2007. The Singapore branch has seen strong expansion in recent years under the management of Martin Frick, Managing Director Asia Pacific.

Source: Avaloq, 12.02.2013

Filed under: Australia, Banking, Singapore, Wealth Management, , , , , , , ,

NYSE Euronext Accelerates Growth in Asia with Strategic Acquisition of Metabit, a Leading Provider of Market Access Products

— Strategically complements NYSE Technologies’ product portfolio and Asian offerings

— Addresses growing customer interest and expanding Asian financial marketplace

— In-line with NYSE Technologies’ strategy of building a global liquidity network

 New York and Tokyo – August 1, 2011 – NYSE Euronext (NYX) announced today it has entered into a definitive agreement to acquire Metabit, a leading Tokyo-based provider of high performance market access products throughout Japan and Asia. Metabit will operate as a product line within the NYSE Technologies portfolio. The transaction is expected to close in third quarter of 2011. Terms of the acquisition were not disclosed.

Skilled with in-depth experience and understanding of financial markets in Asia, Metabit specializes in streamlined, low-latency technology solutions that enable industry-leading access to financial markets across Asia. Metabit’s products connect buy-side order flow with sell-side exchange participants and are designed exclusively for low latency direct market access (DMA) and exchange connectivity to markets through-out Asia. The company is headquartered in Tokyo, with offices in Australia and Hong Kong. Metabit has built a trading community of more than 140 trading firms in Asia.

“Metabit’s products are built in Asia for Asia, and this combination fits our strategy, our connectivity business and our customer interests,” said Stanley Young, CEO of NYSE Technologies. “Metabit has a highly experienced and respected management team, and we recognize and value the success Metabit has had in Asia, especially in Japan. We will continue the further development of this local focus while also maximizing the value of the NYSE Euronext brand and relationships.”

Mr. Young continued: “Furthermore, Japan and Asia are priorities for NYSE Euronext and we believe this is absolutely the right time to further invest in the region. We fully expect this transaction to accelerate our efforts as a leading technology provider across the Asia-Pacific region. We look forward to welcoming Metabit and its customers to NYSE Euronext, and to delivering the benefits of Metabit to our customer community.”

Daniel Burgin, CEO of Metabit, said: “Our combination with NYSE Technologies will be highly beneficial to delivering innovative solutions to our customers and to accelerate achieving our long-term business goals. We remain committed to our local business focus and service quality in Japan and throughout Asia, whilst being strengthened by NYSE Technologies’ product suite that is highly synergetic to our local solutions. The people and products of our combined companies will provide significant expertise and scale to NYSE Technologies’ business in the region. Joining forces represents a truly exceptional opportunity to build on our local success in order to increase our value proposition to our Japan and Asia customer base. We now have the opportunity to leverage our assets with NYSE Technologies and move to the next level. For the benefit of Asia-based customers, we will now expand our reach and capabilities globally.”

 Metabit’s Asia franchise has seen excellent growth as a result of a persistent product and client strategy and investments into Asia. Today, Metabit covers all DMA sectors outside Japan, ranging from China (“B” shares), India, Hong Kong, Korea, Singapore, Taiwan, Thailand, Philippines, Malaysia, Indonesia, Pakistan, Australia and New Zealand. Metabit’s products, being built in Asia for Asia, focus to connect the local broker community in each country, in combination with the traditional group of global trading firms. Metabit will continue to resell and provide support to users of CameronFIX as they have since 2002.

 Upon closing, Mr. Burgin will head the NYSE Technologies Asia business and report to Mr. Young. Peter Tierney, Managing Director of NYSE Technologies will become the Chief Operating Officer of the combined business in Asia, and together they will lead the business operations.

Source; NYSE Tech, 01.08.2011

Filed under: Asia, Australia, China, FIX Connectivity, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, News, Trading Technology, , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Metabit Expands Asian Trade Connectivity

Tokyo/Hong Kong, 29 March 2011: In the past year, Tokyo-based Metabit has concentrated on building its connectivity across Asia.  The company aims to be the local face of execution destinations in Asia and over the past eight months, it has added an extra 13 domestic DMA destinations, expanding domestic and cross-border access to Asian markets.

“Metabit is at the heart of  connectivity in Asia” comments Daniel Burgin, CEO of Metabit, “not just for providing access to Asia for global players, but also in particular for the local and domestic  industry in this region.”

“For example, in India we have 20 execution destinations of which 10 are domestic Indian brokers.  We are similarly successful with increased connectivity in other countries such as Korea and Taiwan.”

Overall, Metabit’s trading access has been extended to many markets ranging from Indonesia to Pakistan and Mainland China to Australia.  The company now has access to over 250 execution destinations, across all active DMA markets in Asia, including Japan.

“We want to maximise connectivity to and within Asia for our client base, who can directly access all execution destinations across the major and emerging markets in Asia either through Metabit’s intuitive XiliX trading platform, or through our MLH via a single FIX connection.”

Burgin adds a final comment, “Situated where we are in Tokyo, with offices in Hong Kong, Dalian and Sydney, we understand the needs of Asia market players, whether they want to trade globally or locally. You could say the mindset of Asia is in our blood – we think Asia, so our clients can trade Asia.”

About Metabit

Uniquely placed in Asia, with global experience and a real knowledge of Asian markets, Metabit provides the technology and support to help clients trade and connect effortlessly and efficiently.  The company delivers an intuitive trading platform that encompasses a well-established trading community and unrivalled exchange connectivity solutions.

Metabit provides ultra low latency DMA trading solutions for Asian markets, serving buy side and sell side clients.  It specialises in comprehensive compliance controls, whilst reducing transaction times and facilitating trading opportunities across all major markets across 14 Asian countries, including Japan.

Metabit’s flagship solutions are XiliX intuitive buy side trading platform and MLH a vendor neutral Market Liquidity Hub.  Alpha provides ultra-low latency exchange connectivity and Exsim simulates Asian and Japanese exchanges.  All Metabit’s products are powered by the CameronFIX engine.

Source: Metabit, 29.03.2011

Filed under: Asia, Australia, China, FIX Connectivity, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, News, Singapore, Thailand, Trading Technology, , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Singapore-Australia exchange tie up threatens Tokyo; Controversy Grows

Japan’s top exchange will seek its own alliances if a planned multi-billion dollar merger of the Singapore and Sydney stock exchanges goes ahead, the bourse’s head said in a report Wednesday.

Atsushi Saito, chief executive of the Tokyo Stock Exchange, told the Financial Times that if SGX’s 8.2 billion dollar offer for ASX went ahead, it would be not be “a good story” for Tokyo.

“If Japan becomes isolated on the international stage — that is not good,” he said. “There are many options. There could be a combination of TSE and others on an international basis.”

Saito’s remarks illustrate how the proposed offer by Singapore’s SGX for ASX has ruffled the region.

“The consensus (among officials at Asian exchanges before the proposed deal was announced) was that such a thing would be impossible in Asia” due to the differences in culture and sense of values, Saito told the newspaper of the proposed deal.

Saito added that if the deal were to go ahead, it could result in a loss for the TSE, which is SGX’s second largest shareholder with 4.9 per cent, the Financial Times said.

“Our shareholdings will be diluted, with our stake falling to about 3.1 per cent. It’s possible we’ll have a loss of hundreds of millions of yen,” he said.

The proposed merger aims to create the world’s fifth biggest exchange with a market capitalisation of about 12.3 billion US dollars, although it first needs to pass regulators and a growing political backlash in Australia.

Analysts say sticking points may include the Singapore government’s large stake in the SGX, which could raise sovereign ownership concerns, and the board’s composition with 11 Singapore representatives and four from Australia.

Source: AFP, 27.10.2010

Controversy grows over SGX’s takeover bid for ASX

The Singapore Exchange’s S$10.7 billion takeover bid for Australia’s ASX Limited faces a difficult road ahead amid political backlash in Australia and shareholder reservations over the deal.

For the transaction to push through, the Australian parliament, currently controlled by a coalition led by the ruling Labour party, would need to lift the 15 percent ownership cap on the ASX bourse. The Australian Treasury could grant a waiver, but the Business Times reports that this could be stymied if any party demands a vote.

Bob Brown of the Greens Party, a key Labour ally, said he was not supportive of the deal given Singapore’s human rights record and the city-state’s execution of an Australian drug smuggler in 2005.

“This is a state that tramples all over freedom of speech, democracy, the rights of oppositions, the ability for public discourse,” he was quoted in a report by the Associated Press. A few other lawmakers also indicated they were inclined to oppose the takeover.

Aside from regulatory approvals, the merger of the two exchanges will also be subject to shareholders’ approvals. But, already, one SGX shareholder has expressed a negative view over the issue.

Under the deal, SGX will issue new shares and pay ASX shareholders a combination of A$22 or S$28.04 in cash and 3.472 new ordinary SGX shares for each existing ASX ordinary share or equivalent to A$48 per share.

Atsushi Saito, chief executive of the Tokyo Stock Exchange (TSE), was quoted by the Financial Times as saying that the transaction could result in a loss for the Japanese exchange, which is SGX’s second largest shareholder with a 4.9 percent stake. He told the UK paper that if the deal were to push through it would not be “a good story” for Tokyo.

Some analysts said the planned acquisition looked expensive. Gabriel Yap, executive chairman of investment firm GCP Global, said the price of A$48 per share “is too high” as it represents 25 times price-to-earnings ratio while the estimated cost synergies and savings at 20% is higher than that achieved in other mergers and takeovers of other exchanges before.

From the point of view of ASX shareholders, “Christmas has come early,” said Yap.

The SGX-ASX deal aims to create the fifth-largest exchange in the world with a market capitalisation of more than US$12.3 billion and to capitalise on opportunities for growth in Asia-Pacific.The press statement on the proposed merger enumerates other benefits.

Source: Fit To Post Singapore, 27.10.2010

Filed under: Australia, Exchanges, Japan, Singapore, , , , , , ,

Asia’s affluent lose one-fifth of wealth in 2008 – CapGemini-Merryll Lynch Asia Wealth Report 2009

Hong Kong’s high-net-worth crowd were the hardest hit by the financial crisis, according to the annual wealth report from Capgemini and Merrill Lynch.

It was perhaps inevitable that after experiencing such rapid wealth growth in the past few years, Asia’s high-net-worth individuals suffered particularly keenly from the recent crisis. But there is still huge market potential in the region for those wealth advisory firms able to tap it.  Download: Asia-Pacific_Wealth_Report_2009_CapG_ML

The wealth of the region’s high-net-worth individuals (HNWIs) — those with $1 million or more in investable assets — fell by 22.3% to $7.4 trillion last year, below the level in 2006. That compares to a fall of 19.5% for global HNWI wealth, according to the 2009 Asia-Pacific Wealth Report, released yesterday by consulting firm Capgemini and Merrill Lynch.

Hong Kong HNWIs saw by far the biggest drop, losing 65.4% of their wealth, followed by those in Australia (29.7%), Singapore (29.4%) and India (29.0%). South Koreans got off lightest with a 13.4% decline in asset value, while Japan saw a fall of 16.7%.

In terms of market capitalisation, the Asia-Pacific region as a whole saw an average fall of 48.6% last year, with China (60.3%) and India (64.1%) suffering the biggest declines of the countries surveyed*.

With regard to asset allocation, the report noted three key trends. First, Asian HNWIs undertook a ‘flight to safety’ to cash-like assets with their allocation to cash-based investments rising to 29% in 2008 from 25% the year before. This reflected an increase in the global allocation to cash in 2008 to 21% from 17% in 2007. Taiwan had the highest allocation to cash/deposits at 41% of its total portfolio, while India had by far the least with 13%.

Another trend was an opportunistic shift back to real estate investment with an allocation of 22% in 2008, up from 20% the year before. Regionally, Australia had the highest allocation to real estate (41%), closely followed by South Korea (38%), while Taiwan had the least (15%).

As for other asset classes, India had the largest allocation to equities (32%), despite the heavy fall in the country’s stock market last year, while South Korea had the smallest (13%). And, perhaps surprisingly, Indonesia had the largest allocation to alternative investments (9%), covering structured products, hedge funds, derivatives, foreign currency, commodities, private equity and venture capital.

The third broad trend noted by the report was a retreat to home-region and domestic investments with HNWIs increasing their domestic investments to 67% in 2008 from 53% the year before. China was the top Asian market for investment by HNWIs in Asia-Pacific ex-Japan, while their peers in Japan preferred to invest domestically.

Allocations to mature markets are likely to increase through 2010 as Asia-Pacific HNWIs seek more stable returns. Allocations to North America, for example, are predicted to rise from 17% last year to 20% in 2010.

In terms of diversity of geographic distribution of investments, Japanese HNWIs were the most diversified beyond Asia in 2008 with 45% of their allocation outside the Asia-Pacific region. The least diversified were the Chinese with a 17% allocation outside Asia-Pacific, and India with a mere 14% invested outside the region.

On a wider level, the crisis resulted in many Asian clients shifting their assets towards regional and local firms, changing the competitive landscape. Such moves exposed “weaknesses in the capabilities of the region’s wealth management firms and especially revealed the disparate strengths and weaknesses of international firms versus regional and local competitors”, says the report.

In terms of the challenges faced by wealth management firms in Asia, they feel maintaining client trust/client retention is by far the biggest concern, according to a Capgemini survey carried out during July and August. Eighty-five percent of wealth management advisers cited this as the biggest challenge they face as a result of the crisis, and 45% cited as the next major issue the need to have the right skill set and talent to cater to HNWI clients.

A closer look at the issue of client attrition shows that 42% of wealth advisers lost clients last year; 63% of those advisers employed an individual-adviser model, while 37% used a team-based model. Meanwhile, younger advisers tended to lose more clients than older ones with 62% of those who lost clients being 40 or under. “Advisers were not mature enough to handle the intense market conditions,” says the report.

Experience is clearly key, and advisers in the Asia-Pacific region were less well able to handle the economic turmoil. The average amount of experience for the region was 9.7 years, versus the global average of 13.3 years. Wealth management firms need to remedy this situation if they are to make the most of the untapped market potential in China, India and elsewhere in the region.

* The report focuses on 11 markets: Australia, China, Hong Kong, India, Indonesia, Japan, New Zealand, Singapore, South Korea, Taiwan and Thailand. Together, these account for 95.3% of Asia-Pacific gross domestic product.

Source: Asian Investor, 14.10.2009

Asian Investor

Filed under: Asia, Australia, China, Hong Kong, India, Japan, Korea, Library, News, Services, Singapore, Thailand, Wealth Management, , , , , , , , , , , , , , , , ,

John Cameron launch FIX Consulting Firm Cameron Edge

Former CameronFIX Chief Architect and Orc Software Chief Technology Officer, John Cameron, has departed Orc Software to establish the consulting firm, Cameron Edge.

Providing expert IT services to the worldwide financial industry, Cameron Edge specializes in the areas of electronic trading systems and the Financial Information eXchange Protocol.

Buy side, sell side and exchanges with internal or external system requirements for routing, market data, FAST, etc, will benefit from Cameron’s specialist domain expertise and know-how.

Cameron Edge services include:

  • Review of existing systems with an eye to refactoring for increased stability and ease of support, performance tuning, evolution/migration to future architectures
  • Analysis, design and coding assistance for new systems
  • FIX system review and design
  • FIX performance tuning
  • FIX training

“The tougher it gets for members of the financial industry, the more efficient their computer systems need to be,” says Cameron Edge principal, John Cameron. “Unprecedented market conditions have simultaneously presented financial firms with their greatest challenges and opportunities and Cameron Edge aims to assist firms gain ‘an edge’ over their competitors through superior IT.”

John Cameron was the original author of the leading CameronFIX Engine acquired by Orc Software in 2006. Cameron Edge will maintain a close relationship with Orc, providing complementary custom services to Orc’s CameronFIX customers.

100% of the fees for John Cameron’s services are donated to a selection of well-known charities.

Source: Finextra, 03.06.2009

Filed under: Asia, Australia, FIX Connectivity, News, Trading Technology, , , , , , ,

Asian equity electronic trading revenues to sink in 2009 – Tabb

Equity electronic trading revenues in Asia Pacific are set to see a 17% fall this year, with liquidity sinking during the downturn, according to research from Tabb Group.

Tabb predicts revenues will drop to $815 million, down 16.9% from $981 million in 2008. This follows a 17.7% decrease in institutional value traded from 2007 to 2008, a year-over-year drop that has affected overall trading strategies across Asia.

Tabb says the global downturn hit just as electronic trading was taking hold in the region, forcing many hedge funds to curtail electronic strategies or simply shutter operations.

Matt Simon, Tabb analyst and report author, says: “In the second half of 2008 there was a significant pullback leading into the first quarter of 2009. Traders saw liquidity sink.”

The research also highlights the slow rate of dark pool trading adoption in the region. Dark pools are estimated to account for at least 10% of all equity trading in the US whilst the introduction of MiFID has spurred their growth in Europe.

They are far less popular in Asia although last month Goldman Sachs launched its Sigma-X dark pool equity trading system in Hong Kong, while CLSA, Instinet and Investment Technology Group also run platforms in the region.

Yet Tabb estimates that only 3.5% of value traded will be matched off-exchange in Japan by 2010, up from 1.2% in 2008. In Hong Kong, Korea, Australia, Singapore and Taiwan, there will be just 1.5% traded off-exchange, although this compares to a paltry 0.3% in 2008.

Other trends indentified by the report include continued global expansion, which is driving connectivity to new markets such as Malaysia, Thailand and Indonesia

In addition, buy-side firms have returned to volume-weighted average price (Vwap) and trade weighted average price (Twap) strategies amidst current volatile market conditions. Meanwhile demand for transaction cost analysis is increasing with 35% of buy-side firms using some type of independent TCA.

Source: Finextra, 23.04.2009

Filed under: Asia, Australia, Exchanges, FIX Connectivity, Hong Kong, Indonesia, Japan, Korea, Malaysia, Singapore, Thailand, Trading Technology, , , , , , , , , , , , , , , , ,

Asia: Investment banking revenues down, but not out

Net revenue generated by banks from core investment banking transactions in the Asia-Pacific region is down 25% to $1.3 billion in the first quarter from $1.7 billion in the same period last year, according to preliminary data from Dealogic, which tracks financial activity.

The drop is less pronounced than the 32% fall in global net revenue to $8.1 billion, and the 45% decline in the Americas to $3.4 billion. Indeed, as the market share held by the US has declined, the Asia-Pacific has increased its share and now accounts for 16% of global core investment banking revenue — up from a 14% share in the first quarter 2008.

Nomura leads the Asia-Pacific core investment bank revenue ranking with a 14% share — the Japanese bank also ranked first in the corresponding period in 2008 with a 9% share. Banking revenues in Japan were up 5% to $542 million, accounting for a 42% share of the market.

The dull spot is China, with a mere $80 million in investment banking revenues year-to-date, down 83% from this time last year. The country’s share in Asia-Pacific is a tiny 6.3%, not much more than Singapore’s 6%. Hong Kong isn’t looking much better, with just $13 million in investment banking revenue in the first quarter, down 68% from the same period last year and representing just 1% of the regional pie.

In terms of products, it comes as no surprise that equity capital markets (ECM) are suffering, with revenues down 75% in Asia ex-Japan, underscoring how much issuance has slowed particularly in China, Hong Kong and India. ECM is down just 39% if you include Australia and Japan and look at Asia-Pacific as a whole.

Nor should it raise too many eyebrows that the good news is to be found in the debt capital markets (DCM), particularly in Australia. If you include Australia and Japan, DCM revenues are up 67% in the Asia-Pacific, and that number stays high — at 65% — if you exclude Japan.

Challenging Nomura on the overall IB front is UBS, which leads the Asia-Pacific (ex-Japan) and Asia (ex-Japan) revenue rankings.

Dealogic defines investment banking revenue as comprising DCM, ECM and M&A transactions, including Chinese A-Shares. When actual fees are not disclosed, Dealogic determines the revenues using what it calls “revenue analytics”. Industry experts we spoke to about these rankings say the figures on bank revenues are “directionally accurate”. As one banker put it: “Banks looks directionally right but the numbers are potentially distorted by one or two deals and mis-estimated methodologies.” While that’s a fair point, unless banks announce their revenues down to the penny (and why would they?) this is a useful benchmark and one used by the banks for marketing.

Origingal Article here

Source: FinanceAsia, 30.03.2009

Filed under: Asia, Australia, Banking, China, Hong Kong, India, Japan, Risk Management, Services, Singapore, Wealth Management, , , , , , , , , , , , , ,

Nomura launches Electronic Trading Platform In Asia-Pacific – Trading Live In Japan, Hong Kong, Singapore and Australia

Nomura, the pre-eminent Asia-based investment bank, this week announced the launch of its Asian Electronic Trading platform, providing clients with Direct Market Access (“DMA”) and Algorithms via its “ModelEx” platform connecting to equity markets in Japan, Hong Kong, Singapore and Australia. ModelEx is Nomura’s algorithmic trading platform which allows clients to electronically access its suite of automated trading strategies.

The firm expects to launch the platform in India, Taiwan and Korea by April 2009.

Nomura is unique in the electronic trading services (ETS) business for its award winning quantitative analytics and risk models, which provide pre- and post-trade analytics, market microstructure and quantitative research to help clients generate new and innovative trading ideas.

The new ETS team combines the best electronic trading capabilities of the Lehman Brothers acquisition, including the quantitative analytics team, developers of the algorithms, information technology and operations personnel, with Nomura’s strong client relationships and dominance in Japan.

Previously, Nomura has been active in the Japan ETS market in both DMA and Direct-Strategy-Access (DSA), utilizing its “Experts” algorithmic platform. The current ETS team, led by Managing Director Rob Laible, has maintained the Nomura platform while at the same time building-out the pan-Asian capabilities of ModelEx in order to ensure seamless execution and provide superior analysis and a competitive edge for its clients.

“Nomura is committed to establishing a world-class suite of electronic trading products for its customers globally, and we’ve been very focused over the last few months on re-establishing a market-leading platform in Asia,” said Rob Laible, Head of Nomura Electronic Trading Services in Asia. “We are well-positioned to offer our long-only clients, hedge funds, pension funds, and other institutional investors value-added and customized trading solutions and execution services.”

Nomura’s Asia-Pacific Equities division delivers the full resources of a multi-product execution platform to its clients globally. Committed to a state-of-the art risk management platform and market-leading research coverage and insight, Nomura provides its clients with a full-service equity broker offering, including structured and flow derivatives sales and trading, cash sales and trading, program and electronic sales and trading, quantitative advisory/analytics, structured derivatives and prime services.

Source: MondoVisione, 26.02.2009

Filed under: Asia, Australia, News, Trading Technology, , , , , , , , , , , , , , , , , , , , , , ,

Australia ASX to expand its Energy and Environmental Product offering

The Australian Securities Exchange (ASX) announces that it intends to list Thermal Coal (Newcastle) futures and options as well as New Zealand Electricity and Victorian Wholesale Gas futures1 contracts on 21 April, 28 April and 5 May 2009 respectively2.

These products are the first tranche in a suite of new Energy and Environmental products that ASX is proposing to launch. Others include Renewable Energy Certificate futures and options; Australian Emissions Unit futures and options (pending the passage of the Carbon Pollution Reduction Scheme legislation); and Certificate Emission Reduction futures and options (AUD denominated and Australian delivered).

The introduction of Thermal Coal (Newcastle) futures and options at ASX will provide the first exchange and clearing house mechanism for thermal coal in the Asia-Pacific that operates independent of editorial index providers and intermediaries in the over-the-counter (OTC) market.

Independence from editorial indices and prices derived from the OTC market will underpin the robustness and sustainability of ASX’s thermal coal product offering.

The expansion of the existing Australian electricity suite of futures and options to include New Zealand contracts will leverage the infrastructure of ASX and the liquidity provided by financial market participants to service new and existing entrants in the New Zealand electricity market.

The introduction of cash-settled Victorian Wholesale Gas futures and options is an important part of ASX’s wider gas market product suite which will expand as gas markets in Australia continue to evolve. An exchange-traded gas derivatives market is crucial to the further integration of energy markets within Australia. It will also support the growth of enhanced energy cross-commodity risk management plays common in mature international energy markets.

The support for gas as a lower carbon emitting fuel source than thermal coal, together with the liquidity of the existing electricity futures and options market operated by ASX, bodes well for the viability of gas and carbon-related futures markets within Australia.

The introduction of the Carbon Pollution Reduction Scheme in 2010 (the largest scheme to date outside the European Union Emissions Trading Scheme) will position Australia – and ASX in particular given its connectivity to compliance buyers and the financial markets that service them – as the leading hub for the trading of carbon-related products in the Asia-Pacific.

For specific summary sheets for the products announced today please visit:

For more information on ASX Energy and Environmental products please visit:

1ASX will announce intended listing dates for New Zealand Electricity options and Victorian Wholesale Gas options in due course.

2The Operating Rules of Sydney Futures Exchange to support these new contracts remain subject to regulatory clearance.

Source: Mondovisione, 11.02.2009

Filed under: Australia, Energy & Environment, Exchanges, News, , , , , , , ,

Asia’s economies reeling as exports evaporate

Asia’s major economies reported a slew of gloomy news on Thursday showing the global crisis was hitting harder, as export-dependent nations feel the pinch from the worldwide slowdown.

China’s economy slowed sharply in the final quarter of 2008 to just 6.8 percent as thousands of factories that sold to overseas markets shut, pulling the full-year growth figure down to 9.0 percent, official data showed.

South Korea said its economy was in the worst shape since the East Asian financial crisis a decade ago, following a 5.6-percent contraction quarter-on-quarter in the final three months of last year.

Japan meanwhile announced a 35 percent plunge in exports in December as consumers worldwide tightened their belts even more, driving Asia’s biggest economy further into recession.

“Exports tumbled so much that you cannot believe your eyes,” said Naoki Murakami, chief economist at Monex Securities in Japan .

The three nations have the biggest economies in Asia, and the data reflected similar gloom across the rest of the region.

National Australia Bank group chief economist Alan Oster described Asia’s economic health as “in a word, poor — and decelerating quickly.

“One of the big problems is when we look at industrial production and GDP across the region, we see quite rapid declines,” Oster told AFP.

Many of the region’s national economies were “trade-exposed” and faced growing problems as global fortunes declined, he said.

“We broadly see the global economy as going into a period where 2009 looks like its going to be the worst year since World War II.”

Singapore reported on Wednesday it was facing its worst-ever recession after the economy contracted by 16.9 percent in the final quarter, its biggest fall on record.

In China , as many as six million people from the countryside have lost their jobs in the cities because of the economic crisis, the National Bureau of Statistics said as it released the economic data for 2008.

Many of these rural migrants worked in factories that sold products overseas, and the bureau’s announcement confirmed the growing problem facing China as export markets evaporate.

“The international financial crisis is deepening and spreading with a continuing negative impact on the domestic economy,” said Ma Jiantang, the head of the statistics bureau.

Chinese Premier Wen Jiabao had already warned this week that 2009 would be “the most difficult year for China’s economic development so far this century”.

Economists said the latest data showed it would be extremely difficult for China economy to grow this year by 8.0 percent, a rate considered by many to be a minimum to maintain employment at a level that ensures social stability.

In South Korea, the government could not hide its shock at how quickly its economy was falling apart.

“We have forecast a bleak economic outlook but things are getting worse faster than has been expected,” Vice Finance Minister Hur Kyung-Wook told reporters.

Year-on-year, the economy shrank 3.4 percent in the fourth quarter compared with 3.8 percent growth in the third. The annualised figure showed the biggest fall since the fourth quarter of 1998 when it contracted six percent.

For the whole of 2008, South Korea’s economy grew 2.5 percent, sharply down from a five percent expansion in 2007, the central bank said.

The trade data out of Japan led analysts to predict that the economy there would suffer its worst performance since 1974 in the fourth quarter of 2008.

“It’s inevitable that we will see a 10 percent or steeper drop,” said Hiroshi Watanabe, an economist at Daiwa Institute of Research.

Source: AFP, Beijing, 22.01.2009

Filed under: Asia, Australia, China, Japan, Korea, News, Singapore, , , , , , , , , , ,

Chi-X seeks new business model for Asia

Founder Tony Mackay explains why the electronic trading network can’t easily tread the same path it forged in Europe.
Chi-X, the European-based electronic trading exchange, will succeed in getting established in the Asia-Pacific theatre only if it collaborates with local stock exchanges – the very entities that fear being displaced by its superior technology and anonymity.

Tony Mackay, who founded Chi-X as a spin-off from his former employer, Instinet, says there is no way the network will get off the ground in Asia if its business model is simply one of undercutting national stock exchanges’ pricing.

Mackay is now co-based in Hong Kong, where the network has opened an office. It also has people on the ground in Japan, Singapore and Australia. Chi-X has applied to be regulated as an exchange in Australia and is preparing to follow suit in Japan.

Unlike its original parent, Instinet, Chi-X is not keen to be regulated as a broker. Instinet continues to steadily divest shares to financial institutions, mainly broker/dealers, that trade high volumes on Chi-X. It sees itself more as a utility. (Chi-X’s ultimate parent is Nomura, which owns Instinet.)

In Europe, it went live in London in May 2007, where it adopted a more obviously competitive relationship on the back of its technological platform – but also thanks to European-wide regulation (Mifid) that scrapped restrictions on competitive trading platforms and clearing.

There is no Asian equivalent to Mifid, and across the region’s markets, any trades done on an alternative network would have to still be reported to the national exchange – which undermines Chi-X’s ability to match counterparts on an anonymous basis.

The region’s exchanges are nervous about letting in a competitor such as Chi-X. When it opened doors in London two years ago, it was capable of handling 30,000 trades per second – versus the London Stock Exchange’s mere 200. It has since won 15% market share – which in some stocks means as much as 40% of the market.

It has done so thanks to its adoption by statistical arbitrage traders – the likes of Citadel Group and DE Shaw, big hedge funds that execute literally tens of thousands of transactions across asset classes at any given moment. Market makers, investment banks’ prop desks and traditional buy-side investors participate on the other side.

There are a number of such players in Asia that would like to execute similar strategies here, but cannot because the market infrastructure wouldn’t support them. There are also many traditional money managers keen to see the high spreads in Asia come down, liquidity improve, and efficiency gains achieved.

Mackay realises that, without something like Mifid, there is nothing to compel national regulators to allow Chi-X to operate with a free hand. Chi-X has therefore established a new company, Chi-Tech, which is vending the same technology used by Chi-X.

Mackay notes that the LSE responded to Chi-X and other electronic networks (including Bats, Turquoise and Nasdaq) by spending around $100 million to improve its systems – a hefty commitment, and even then it wasn’t as fast. Chi-Tech is prepared to sell similar IT to Asian exchanges (which typically struggle to reach 100 trades per second) for $10-15 million.

“We want to make the market bigger and more efficient first. Then we can all grow,” Mackay says. “We’re not going to start a pricing war.”

In theory, if a number of Asian markets work with Chi-Tech, it can serve as the “glue” between them, allowing cross-border market-making and trading.

Chi-X is also hoping to help make clearing more efficient. Its competitive advantage in Europe was strengthened by working with a multilateral clearing facility run by Fortis, which charges only 10% of what European exchanges levy to settle trades – a savings that has attracted a lot of business from institutional money managers.

The credit crunch has set back its plans: Mackay was hopeful of winning approval in Australia last autumn, when Lehman Brothers collapsed. He doesn’t think the severe pressure on prop desks and hedge funds – many of which have closed – will stymie Chi-X’s opportunity, however. In particular, the diversified, short-term, market-neutral nature of statistical arbitrage means these strategies remain intact. Its practitioners are partnerships that are more disciplined about their own money than a typical investment bank prop desk.

Volumes in Europe are down as much as 50%, however, because activity among prop desks, traditional hedge funds and long-only managers has been sharply curtailed. “The whole market has become smaller for everyone,” Mackay says.

Source: Asian Investor, Jame DiBiasio, 13.01.2009

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Global economic slowdown is not stopping Asia’s exchanges.

A  year ago, traders and technology vendors in Asia were riding a growing wave of liquidity and technology adoption. Direct market access (DMA), alternative trading systems (ATSes) and crossing networks steadily increased throughout the region as regulatory barriers began to fall away. While the financial crisis is putting a damper on the party, don’t expect opportunities in Asia to dry up, experts say.

“Asia is on a path of evolution that is going to converge eventually with the technology in the West,” says Neil Katkov, the Tokyo-based managing director of the Asia research group at Celent, a global financial market research and consultancy. With many traders and brokerages tightening their belts, adoption may slow, he says, but it will not disappear.

The opportunities are greatest for Asia’s exchanges themselves, which could take advantage of the slowdown to improve their own technology and compete with some of the trading networks that have been entering the region. “I think we’re going to see more of a realization from the exchanges that adopting modern technology is a competitive imperative,” Katkov says.

While algorithmic trading and order management systems (OMSes) have continued to grow in the region, the trends that attracted the most attention in 2008 were trading networks and DMA capabilities. Regulators in the region spent much of the year grappling with how to accommodate the dark pools, crossing networks and off-exchange trading platforms that were arriving and expanding.

These networks have been driven in part by an expansion of asset classes. A wide range of investors has been diversifying, adding new products into their portfolio. “Traditional buy-side firms such as pensions are starting to look into over-the-counter (OTC) derivatives, commodities and foreign exchange (FX),” Katkov says. “More products are being traded more frequently by more types of people.”

Local brokerages are also starting to make a difference, says Nevin Price, regional manager for Asia at Fidessa, a global trading systems, market data and connectivity solutions vendor. Aiming to compete with larger international firms, local brokerages are looking to adopt the newest technologies and gain access to new markets. As markets tighten, brokers want to keep costs down, and technologies that help to streamline trading and provide easy access to exchanges have been on the rise.

Many of these brokerages had their options expanded in the last year. Joining Liquidnet and ITG, which have been operating crossing networks in Asia since 2007, a new network entered the market.

BlocSec, an Asian electronic crossing network that opened in May and is owned by brokerage CLSA, now has 70 customers and operates in Hong Kong, Japan and Singapore. Liquidnet and ITG’s Posit network have also expanded their networks in the region. Still, with only a handful of players, there is ample room to grow.

“While dark pools have exploded in the US, they are still at their beginning stages in Asia,” says Ned Phillips, CEO of BlocSec. “I really think the more platforms the better in Asia, as it will grow the market but will not result in the fragmentation seen in the US.”

Crossing networks have an easier time entering Asia, as they don’t require a wholesale change in regulations, says Katkov. The arrival of DMA and the push of alternative trading networks, however, signal the loosening of some regulatory barriers in the region. “India has just allowed DMA this year and Australia is considering allowing off-exchange trading,”

While regulatory changes opened up markets in the past year, the financial crisis could prompt some exchanges to act defensively, blocking the incursion of off-exchange trading platforms and other networks that could cut into their liquidity.

Exchanges have taken defensive positions in the past, like  Australia as a recent example. While three off-exchange networks have applied to operate in the country, a call to review the regulations governing exchanges in the country has delayed the process for more than a year. Malaysia has also delayed allowing DMA on that country’s exchange.

Sang Lee, co-founder and managing director of Aite Group, an independent research and consultancy firms focusing on the financial services industry, says he believes the economic slowdown will help Asia’s exchanges view the competition in a new light. “Ironically, with all this mess happening the exchanges themselves are in great positions,” Lee says. “In the Asia market, real competition has not happened yet. All of the exchanges in Asia have the opportunity to become more innovative and more aggressive and competitive against some of these new smaller players.”

Many of the problems of the financial crisis appeared in the OTC market, Lee points out, which do not boast the transparency that traditional exchanges offer. “All indications are that we will see a heavier hand in terms of regulation in the coming year,” he says. “The global exchange market will have a lot of opportunities to take advantage of that.”

This is an opportunity that is unique to Asia. In Europe and the US, traditional exchanges are already losing significant amounts of liquidity to alternative trading venues. “For the European market it might be too late already,” says Sang. “But in Asia, exchanges have the chance to come out ahead.”

Exchanges in Asia could move to beat dark pools at their own game, offering their own alternative-type trading venues. Partnering with already-established networks in the West such as Chi-X could be another strategy Asian exchanges employ in the future.

“These are defensive moves, but not in a conservative way,” Katkov says. “Instead, they are trying to embrace new technologies and attract the most efficient services they can. I think that is the type of defensive move we’re more likely to see.”

Source: Waters Online, by Lauren Hilgers 06.01.2009

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Asia-Pacific Wealth Report 2008 -GapGemini Merrill Lynch

Down Load: ASIA PACIFIC Wealth Report 2008 GapGemini & Merrill Lynch

Source: GapGemini – Merrill Lynch, December 2008

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Asia-Pacific: Best-Execution Regulations on the Way?

While the U.S. and European Union have rules mandating that brokerages find the best possible price for clients, there are currently no equivalents in the Asia-Pacific region. That could change, however, as algorithmic trading, technology advances and buy-side pressure nudge the more developed economies in that direction.

“The buy side is taking increasing control of the trading process and the concept of best execution is gaining traction, although we are still some years behind the U.S., and to a lesser extent Europe, in terms of the availability of alternative trading venues,” said Gabe Butler, director of sales in Hong Kong for New York-based agency brokerage Investment Technology Group (ITG). There are more than 40 alternative trading systems (ATSs) in the U.S., and a bevy of platforms have been launched in the EU since the Markets in Financial Instruments Directive (MiFID) became effective late last year.


In Australia, the Investment & Financial Services Association–a trade group representing buy-side firms–issued guidance in 2006, but the country has not yet made best execution a regulatory requirement. Brokers, however, are taking the idea seriously, due in part to buy-side demand.

Steven Hammerton, head of portfolio trading and direct execution at UBS Securities Australia in Sydney, noted that “UBS has been strictly in compliance with best execution, and we think it’s something very important to our clients. We’ve been investing heavily to achieve best execution.” Hammerton pointed to the firm’s algorithms, which are “written in a way to help you achieve best execution in a fast-moving market.”

The growing use of algorithmic trading and direct-market access (DMA) in Australia this year has increased volatility and widened spreads, which “has resulted in the standard deviation of estimated trading cost more than doubling,” said David Broadfield, analyst at ITG and author of a recent report on Australian market microstructure. “This highlights the importance of execution to the overall investment process and the potential danger of failing to adopt best-execution practices.”

Fund managers need to pay attention to hidden costs, said Michael Corcoran, ITG’s Sydney-based director of trading. Research shows that obvious costs–broker commissions and tax–are staying close to 18 basis points, said Corcoran, whereas hidden costs raise that to 48 basis points. “They will have to more aggressively reduce the hidden costs within their portfolios if they want to stay in the game,” he said, adding that advanced trading methods can help bring those costs down once they are identified.

The game is about to change in Australia, as regulators are expected to open the Australian Stock Exchange up to competition from ATSs. Among those waiting for final approval are the AXE electronic communications network-owned by the New Zealand Exchange and a consortium of investment banks–Liquidnet Australia and Instinet–backed Chi-X.

“With the regulatory changes, there will be more electronic exchanges in the future,” said UBS’s Hammerton, adding that his firm will be well positioned to seek liquidity from those destinations. “We have invested in smart-order routing technology and will be able to offer clients smart DMA, which routes to the exchange with the best price,” he said.

Japanese ATSs

In Japan, “buy-side firms still have to go through brokers because direct connections to the exchanges are not available inside Japan,” explained Neil Katkov, Tokyo-based head of Asia research for Celent. “Less competition leads to an opaque market, where investors can’t be well protected.” For example, he said, several large local brokers are internalizing trades and benefiting from wide spreads.

“There is not much in the way of best-execution regulation, like in the U.S. and Europe,” said Katkov. Japan’s Financial Services Agency is only now beginning to make such initiatives a priority, he added, recently passing execution rules that will protect participants in pension plans. The regulators, however, are looking at adopting broader rules, in the style of MiFID or Regulation National Market System in the U.S.

Until then, the buy side will continue turning to alternative trading platforms, noted Katkov. Asia’s first crossing network, JapanCrossing, was launched in 2001 by New York-based agency broker Instinet, which is now a subsidiary of Nomura Holdings. But such venues–called private trading systems in Japan–have not been able to grab more than a 1 percent market share due to the existing exchanges’ chokehold.

Still, platforms such as Japannext and Monex Nighter are seeing increased volumes and vendors including MetaBit, TradingScreen, Tora Trading Services and Bloomberg are offering advanced connectivity. “Trading on such platforms is increasing because it gives buy-side investors a choice among quotes and, therefore, potentially better execution,” said Katkov.

No Plans in Hong Kong

DMA is available in Hong Kong and algorithmic trading is in demand, but best-execution regulations are not yet in the works. In a June speech, Martin Wheatley, chairman of the Hong Kong Securities and Futures Commission (SFC), noted that Hong Kong doesn’t need a Reg NMS because “we do not have alternative trading venues here where investors can trade Hong Kong securities.” But, “given the trends in the marketplace and the advances in technology, the SFC and other regulators in the region do need to keep an eye on the international development of this issue.”

ATSs are allowed under the current laws, but a key concern “is the accompanying fragmentation of previously centralized trading,” continued Wheatley. “These types of trades contribute to reducing liquidity in the reference market, simply by virtue of the fact that fewer orders get posted there. This in turn raises difficult questions about the extent to which the broker’s client is really achieving best execution.”

BlocSec operates a pan-Asian block trading platform that went live in Japan, Singapore and Hong Kong in May. Ned Phillips, CEO of BlocSec, a subsidiary of Hong Kong-based CLSA Asia-Pacific Markets, said that he sees growing interest in alternative platforms in Asia. BlocSec, which currently has 75 clients in Hong Kong, plans to expand to Australia and Korea next.

Ben Kwong, COO of Hong Kong brokerage KGI Securities Co., said that local brokers are “heavily investing in trading technologies.” KGI, for one, plans to invest HK$30 million ($3.8 million) this year to improve its trading platform because “it is the best way to save money,” said Kwong. “The average trading cost in Hong Kong is about 25 basis points, compared with 15 basis points with electronic trading.”

Korea Slow to Change

In Korea, best-execution rules are still in the distant future. Instinet and Samsung Securities in March launched Korea’s first crossing network. In July, Investment & Securities Co. became the country’s first firm to offer algorithmic trading capabilities to international clients, adopting event processing technology from Progress Software Corp.’s Apama division. Algorithms have yet to be widely adopted in the market, according to Gyun Jun, analyst from Seoul-based Samsung Securities.

Source:, 22.09.2008 by Wang Fangqing see full report at Securities Industry News

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