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ASEAN Exchanges plans on track to promote ASEAN as an asset class

Following the November 2011 ASEAN Exchanges CEOs meeting, the ASEAN Exchanges CEOs today announced that the collaboration framework is on track towards meeting its goals of collectively promoting ASEAN as a highly investable asset class.

The Philippine Stock Exchange President and CEO, Hans Sicat said, “the marketing of the ASEAN Stars and the work on an ASEAN index series continues as planned with the ASEAN Exchanges collaboration members. The 2012 marketing activities for ASEAN Exchanges will be finalised at our scheduled CEOs meeting on December 2nd in Hanoi.”

The seven ASEAN Exchanges have a combined market capitalization of approximately USD2.0 trillion and more than 3,600 companies listed on their exchanges. Some of these companies are the largest and most dynamic companies in the world, including leaders in finance and banking, energy, telecommunications, commodities, automotive manufacturing and other industrial sectors.

The CEOs also announced the awaited roll-out plan of the ASEAN Trading Link which will see the participation of member exchanges taking place progressively in stages. The first stage will see the connectivity of Singapore Exchange and Bursa Malaysia in June 2012 and the Stock Exchange of Thailand added in August 2012 after its new trading engine goes live. The participation dates of the other ASEAN Exchanges collaboration members, namely, Hanoi Stock Exchange, HoChiMinh Stock Exchange, Indonesia Stock Exchange and The Philippines Stock Exchange will be announced at a future date.

Tajuddin Atan of Bursa Malaysia Berhad said, “The three bourses that will participate in the first stage of the ASEAN Trading Link represent approximately 70% of the market capitalization of the 7-member collaboration, thus offering substantial investment opportunities for investors.”

Source: MondoVisione, 17.11.2011

Filed under: Exchanges, Indonesia, Malaysia, Singapore, Thailand, Vietnam, , , , , , , , , , , ,

Asean exchanges select Nyse Technologies to build trading network

A group of Asean stock exchanges have appointed Nyse Technologies to build a direct market access electronic trading link.

Last February Bursa Malaysia, the Philippine Stock Exchange, Singapore Exchange and the Stock Exchange of Thailand outlined plans to create a single access point to ease cross-border trading and attract more international fund flows into the region. Indonesia’s exchange was initially part of the group but is no longer involved.

The partners have now signed a letter of intent appointing Nyse Euronext’s IT unit to design, build and manage the technology required for the trading link.

Nyse Technologies says its system will be underpinned by a resilient networking infrastructure that will interconnect the Asean member exchange’s and, through them, their respective communities.

The system will include services that tap this network to provide integrated market data feeds from all the participating markets and a standardised entry point for trading. Expansion of the trading link’s markets will be helped by the risk management and controls put in place, says Nyse.

In addition, the system will integrate with the Nyse Euronext communication network infrastructure, SFTI. This will give STFI members streamlined and cost effective access to trading in the Asean Trading Link markets.

Duncan Niederauer, CEO, Nyse Euronext, says: “The Asean Trading Link will strengthen the competitiveness of the member exchanges and enable them to better serve their customers. National and regional interest will be well served by giving investors greater access to global capital to facilitate new development, growth and wealth creation.”

Francisco Edralin Lim, CEO, Philippine Stock Exchange, adds: “Nyse Technologies brings to the table vast experience in the Exchange solutions business and we are confident that they will deliver cutting edge solutions that meet all our requirements. We are also excited about the possibilities of leveraging their extensive order routing networks to bring order flow into the Asean markets.”

Source, Finextra, 08.02.2010

Filed under: Asia, Exchanges, Malaysia, News, Singapore, Trading Technology, , , , , , , , , , , , ,

ASEAN markets cross trading links in demand – TABB Group

In new equity markets research published today, TABB Group says US and European demand for electronic linkage to Association of Southeast Asian Nations (ASEAN) exchanges is strong and primed to expand, as seamless access will attract brokers already trading in other parts of Asia. However, there is a wide range of needs across the different market segment, including direct market access (DMA), low-cost versus real-time market data, advanced order types, and reliable trading platforms.

TABB’s senior analyst Kevin McPartland, who authored the ASEAN Equity Markets Pinpoint report, an industry update on equity trading in the ASEAN region covering the Indonesia, Philippines, Thailand, Vietnam, Malaysia and Singapore exchanges, says the global financial crisis had little impact on growing buy-side demand for trading in ASEAN markets.

“More seamless access will drive brokers already operating in other parts of Asia to begin trading in the ASEAN markets,” he says, with the sell side set to benefit most from that seamless access. Explaining that the availability of real-time market data is crucial for all trading in the ASEAN markets, and that real time data is a requirement for the sell side even when trade volumes are low or non-existent, he adds, “High costs and time zones do tend to limit buy-side market data usage outside of the region.”

Addressing the relationship between the buy side and sell side, McPartland says that although no single broker currently dominates across all Asian markets, over 90% of buy-side firms are unwilling to give brokers full discretion over their orders. However, while the buy side does look to their brokers for market access, they agree that more seamless access would lower costs for execution and market data. There is also significant support for the idea of central ASEAN execution venue, McPartland adds.

The report’s in-depth coverage includes 24 charts:

  • Support for a central ASEAN venue
  • Improving ASEAN trading
  • Sell-side interest in ASEAN linkage
  • % of bulge-bracket participants trading in each market
  • Impact of the financial crisis on ASEAN interest
  • Roadblocks to sell-side trading in ASEAN markets
  • Buy-side broker usage – all Asia ·
  • Buy-side broker usage – ASEAN markets
  • Top brokers by country (by # of mentions)
  • Bulge-bracket participants trading in each market
  • Mid-tier participants trading in each market
  • Buy-side interest in a seamless ASEAN linkage
  • Roadblocks to buy-side access of ASEAN markets
  • Average number of buy-side orders per week
  • Average blended commission rates (bps)
  • % for which counterparty risk is an issue
  • Importance of each component when trading in ASEAN markets
  • Markets providing real-time market data to sell side
  • Market data sources for sell side
  • Markets providing real-time market data to buy side
  • Reasons for buy side’s lack of market data
  • How the buy side trades ASEAN markets
  • % of buy side using multiple data providers ·
  • Sell-side and buy-side market data providers

TABB Group collected data through interviews with heads of electronic trading from 12 top global broker-dealers, 9 hedge funds and 14 institutional asset managers. On the buy side, participants had combined global assets under management (AuM) of approximately $6 trillion and are currently trading in Asia from slightly under $10 million to over $5 billion monthly.

Source: MondoVisione, 23.10.2009

Filed under: Asia, Data Management, Exchanges, Indonesia, Malaysia, Market Data, News, Singapore, Thailand, Trading Technology, Vietnam, , , , , , , , , , , , , , , , , , , , , ,

Asean bourses pledge electronic trading link

So far Southeast Asia’s stock exchanges have been good at signing MOUs but not so good at actually harmonising markets. Will this time be different?

Five Southeast Asian stock exchanges have signed an agreement to establish a single electronic trading link for regional or global investors to access their markets on a uniform basis, and thereby establish Asean markets as an asset class.

The mechanism among the five countries — Indonesia, Malaysia, the Philippines, Singapore and Thailand — will enable their clearing houses to act as central counterparties that can clear and settle cross-border trades among them.

Brokers with seats in any of the five exchanges would not need to consider other participating exchanges as foreign, thereby reducing risk. Investors may come to see Asean as a trading bloc, with economies of scale helping to bring down transaction costs and improve liquidity. Creating a single market would spur liberalisation in other areas.

That, at least, is the theory, as announced after business hours yesterday. Executives at these bourses have been talking about building an electronic link for years. These markets are small, which drives up the cost of cross-border trades.

At a time when major bourses around the globe are tying up, alternative electronic trading venues are penetrating the region, and events are being driven by pan-European directives such as Mifid, Southeast Asia’s fragmented markets risk falling well behind. New technologies such as dark pools and direct-market access trading have marginalised them further, because of their illiquidity.

So exchange officials and politicians have long recognised the need to harmonise their systems in order to remain attractive to global investors, market Southeast Asia as an asset class, and enhance the pool of capital available locally.

But politics have gotten in the way: Singapore is the obvious hub for the region, a fact that Singaporean officials like to point out, which makes the other players jealous and unwilling to give up control over their little patches.

Nonetheless, there has been bilateral progress. SGX CEO Hsieh Fu-Hua first proposed such a multilateral link in 2006. The following year, SGX and Bursa Malaysia unveiled a cross-border electronic link for trading securities.

Now, along with this announcement of Asean-wide cooperation, SGX and the Stock Exchange of Thailand are also pledging to jointly promote market activities, as well as operational and regulatory information, and discuss the idea of cross-border trading of securities and derivatives.

SGX’s Hsieh says the e-trading link will be operational sometime in 2010. By putting a date on the project, he and his counterparts at other exchanges are taking a concrete step towards harmonising their markets for the first time.

Source: AsianInvestor, 24.02.2009

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

Thai bourse to launch Islamic index in Q2

The Stock Exchange of Thailand plans to launch an Islamic Index in the second quarter of this year, the bourse’s Group Head of Market Development Santi Kiranand said Monday.

The index, to be called the FTSE SET Shariah Index, will comprise 55 stocks with a combined market capitalisation of around THB1.7 trillion (US$49 billion), equivalent to 47% of the total stock market, Santi told reporters.

The bourse is scheduled to meet investors in the United Arab Emirates and Abu Dhabi in the second half of this year to promote the Islamic index, he added.

The exchange also plans to launch a social responsibility index in the third quarter. Stocks under this index would account for 10% to 20% of total market capitalisation, Santi said.

Source: Intellasia | Dow Jones, 04.02.2009

Filed under: Exchanges, Islamic Finance, News, Thailand, , , , , , , ,

Asian Exchanges: Opportunities in Asia’s SouthEast Asian Markets

MALAYSIA-With the financial crisis expected to slow technology adoption throughout the Asia-Pacific region in the coming year, many are expecting some of Asia’s smaller exchanges to play a growing role in the market.

The Vietnam, Thailand and Malaysia exchanges, for example, lag behind some of their neighbors in terms of trading technology. These markets lack some of the basics, and technology vendors in the region will benefit as they fill in the gaps.

Malaysia introduced a new trading platform in early December aimed at improving latency and allowing traders to access the exchange electronically. “As the Malaysian marketplace progresses, we must leverage new technologies to allow market users and investors access to more trading opportunities,” says Dato’ Yusli Mohamed Yusoff, CEO of the Bursa Malaysia Berhad. As the exchange goes, local brokerages will likely follow suit, adopting new technologies to stay competitive.

Traders and technology vendors also have their eyes on Vietnam and Thailand. GL Trade is planning on adding Thailand to its own DMA platform in 2009, going through local brokerage Seamico Securities Public Company Ltd.

Vietnam operates with an electronic matching system, but traders are still waiting for the exchange to improve its communication with brokerages. Other small exchanges are expected to come on the scene in 2009, including the Cambodian Stock Exchange, a joint venture between the Korea Exchange and the Cambodian government. The exchange may be small, but for technology vendors, the new markets will help keep sales up in tough times.

Source: Watersonline by Lauren Hilgers, 06.01.2009

Filed under: Exchanges, Indonesia, Malaysia, News, Singapore, Thailand, Trading Technology, Vietnam, , , , , , , , , , , , ,

Asian Traders and Investors Conference 2008 国際分散投資フェア

The Asia Trader & Investor Convention (ATIC) is the largest platform for Asia’s local investors and traders. An average of 6000 visitors gather in different cities to learn and be educated about the latest strategies, products and services offered by local and international Exchanges, Brokerage Firms, Banks, Asset Management Firms, Information Service Vendors and other financial service providers.

Tokyo, 1-2 November 2008 Sponsor Opportunities 国際分散投資フェア

Ho Chi Min City, 31 May – 1 June 2008
Mumbai, 12-13 April, 2008
Kuala Lumpur, 22-23 March, 2008
Singapore, 1-2 March,2008
Bangkok, 12-13 January

Filed under: Events, , , , , , , , , , , , , , , , , , , , , , , ,

Asia Pacific exchanges added to Tenfore’s global coverage as investors seek new opportunities

Global market data provider Tenfore has expanded its global coverage with the addition of comprehensive “Level Two” market data1 for four Asian and Pacific markets. Gordon Bloor, CEO of Tenfore said: “The addition of New Zealand, The Philippines, Bursa Malaysia and Thailand reflects investment trends with investors seeking new opportunities, with a particular focus on the Far East. Full article click here.

Source: Tenfore 16.07.2008

Filed under: Data Management, Data Vendor, Market Data, News, Reference Data, , , , , , , , , , , , , , , , ,

6 Asian Stock Exchanges discuss trading tie-up

The FT reports that six Asian stock exchanges are working on plans to develop an integrated platform for display and execution of trades for the largest 180 companies in the region.
The plan is being elaborated by the stock exchanges of Thailand, Malaysia, Singapore, Vietnam, Indonesia and the Philippines, says the FT, which quotes Thai exchange chairman Pakorn Malakul Na Ayudhya.”What you see beginning to develop is the integration of stock exchanges in this part of the world,” he told the paper, pointing to recent initiatives by the mature bourses of Thailand and Korea to help set up fledgling stock market trading systems in Laos and Cambodia.

Collaboration between the six bigger exchanges would entail each bourse adding its 30 leading companies to a linked electronic trading platform, giving domestic investors in each country direct access via their local brokerage to a portfolio of 150 foreign companies.

The report does not go into detail on technology options available to the participating exchanges, although both Nyse Euronext and Nasdaq OMX are active in the regions, supplying trading systems to Malaysia and SGX respectively.

Source:Finextra 09.07.08

Filed under: News, , , , , , , , , , , , , , , , ,

ASEAN:Six-country Asian board due in 2009

Bangkok Post |NUNTAWUN POLKUAMDEE | 24.06.2007

The new six-country Asian board should begin operations by mid-2009, comprising 180 stocks representing the 30 largest listed companies for each market.

Nongram Wongwanich, an executive vice-president for the Stock Exchange of Thailand, said officials of the six participating exchanges hoped to select a vendor in August to set up a trading system for the new board.

The two vendors being considered are NYSE Euronext and the Nasdaq OMX Group. The vendor would be responsible for establishing a trading platform allowing real-time updates for all securities on the board.

The Asian board concept is aimed at facilitating links between the stock exchanges of Singapore, Malaysia, Thailand, Indonesia, the Philippines and Vietnam. The 180 securities to be included in the new board would have a combined market capitalisation of US$818.66 billion, or 59% of the combined market capitalisation of the six exchanges based on current data.

Financials would lead the board in terms of industry, followed by industries and consumer goods.

Mrs Nongram said that by joining together, the six Asean members could raise their profile in the global financial market beyond what any single exchange could do on its own.

If the Asean stock markets were combined, the resulting entity would rank 13th in the world, according to the World Federation of Exchanges. The Asian board alone would rank 20th among WFE members.The Asian board would first start with Thailand and Singapore, to be followed by the other four markets.

Mrs Nongram said the SET would select securities for participation based on companies ranked in the SET50 index. Final selections would be based on market capitalisation, trading liquidity and the availability of information, such as research coverage by analysts.

The SET would consider expanding the bid-offer limits for securities, as some exchanges allow matching at up to five levels compared with the three levels used in Thailand.

Filed under: Asia, Exchanges, Indonesia, Malaysia, News, Singapore, Thailand, Vietnam, , , , , , , ,

Asian Exchanges – The Awakening (Part I)

By Stephan Stadelmann, FINETIK

Published in AsiaMarketsIT.com on 01 Apr 2007 12:35:53

The Asian Century

During the past decade, Asia has fallen periodically in and out of favour with investors globally. Excitement has been followed by caution, which has been followed by excitement once again. Today’s focus on Asia, which owes much credit to the rise of the Chinese and Indian markets, shows signs of becoming a stable period of global investment into Asia. It is no coincidence that some analysts have called this the “Asia Century”. Against this backdrop, the exchanges in the Asia-Pacific region have lagged behind their US and European competitors (with perhaps the exception of the Australian Stock Exchange (ASX)).

However, with hindsight, this could turn out for the better for Asia’s exchanges, as it gives them ample opportunity to study the ingredients of past successes and failures. Governments in Asia are much more involved in the business of exchanges than in Western countries, and the process of deciding on change, and how to execute such change, can be cumbersome, and might follow paths that are not always obvious to the observer, or to external firms that decide to pitch for any business with Asian exchanges. However, once Asian exchanges have decided to make change, they tend to be genuinely determined to carry it through.

Challenges and Opportunities

The challenges and opportunities facing the exchanges and their market participants in what is the fastest growing part of the world are substantial.

Let’s look at China, where 2.5 million new investor accounts were added to the Shanghai Stock Exchange (SSE) in 2006 alone, making a total of 41 million accounts. The Shanghai and Shenzhen Stock Exchange exceeded a combined 80 million registered accounts in Q1 2007, and there is no slowdown in sight. SSE’s existing trading system is scheduled to be replaced in Q3 2007 with new generation trading systems designed to accommodate at least 80 million accounts, 20,000 order matches per second and a scalable minimum of 63 million executions a day. The new systems will cater for multiple asset classes such as cash equities, funds, warrants, bonds and financial and commodity derivatives.

Another much talked-about market is Vietnam’s HoSTC (Ho Chi Min Securities Trading Centre). HoSTC is at a very different crossroads on its path to growth and deregulation from that of the SSE, but there are similarities. HoSTC is also doubling its number of trading accounts, and the pilgrimage of foreign institutional and retail investors into Vietnam is ongoing. The demand for investing into the exchange manifests itself in some very peculiar forms: for example, travel agents in Japan sell tour packages to Vietnam that offer tourists the opportunity to open “a trading account (on HoSTC) after your tour of the Museum of American War”. Such tactics aside, the order placement, matching and trade execution processes on HoSTC are still extremely laborious and manual today. By May 2007, continuous trading will be introduced, and by mid-2008 a new trading system with electronic direct market access (DMA) is scheduled to be in place.

From a technology perspective, the global FIX protocol standard has been accepted by stock exchanges in the Asia-Pacific region. However, though interest is on the rise, adoption in practice is slow. Exceptions to this are ASX, leading the way in Asia (using FIX for trading and market data), followed by the Singapore Stock Exchange (SGX). Bursa Malaysia (BM) and the Stock Exchange of Thailand (SET) are following, by launching FIX connections to their trading terminals. China’s Shanghai and Shenzhen Stock Exchanges are leveraging the concept of the FIX protocol, albeit in a modified form: they are using what they term STEP, Securities Trading Exchange Protocol, for their internal benefit.

Legacy System Replacement

There is a need for most if not all exchanges in Asia to replace their current legacy systems. This requirement is being driven by the demands of inflowing investments that compel the exchanges to cope with high volume growth and demand for DMA. While foreign market players are the driving force, domestic participants are increasingly starting to engage in DMA, and domestic trading volumes are also on the rise. Asia’s exchanges are also under pressure to extend their product ranges for foreign investors. This, coupled with the need to increase trading capacity, further confirms the trend to replace legacy systems. The Asia-Pacific region is an increasingly competitive environment in which markets are fighting for an increased share of incoming investments, and one highly visible marketing strategy is to publicise plans to replace and upgrade legacy exchange systems. This may, to some extent, explain why some of the more conservative exchanges seem to be executing such replacement projects half- heartedly in the eyes of foreign market participants and the international software firms that are trying to win these exchanges’ lucrative and prestigious technology replacement projects.

Asia endeavours to be self-sufficient. As a result, its exchanges believe there are opportunities to promote and sell their own trading technologies to other exchanges within the region. For example, SET, BM and Korean Stock Exchange (KRX) are becoming de facto technology vendors to emerging markets like Vietnam. At the opposite end of the spectrum, FT India, a trading systems technology provider, has emerged as a dominant exchange in India with MCX (Multi Commodity Exchange), and owns part of DGCX (Dubai Gold & Commodity Exchange). FT India is currently expanding its activities through active involvement with other exchanges in the region, providing consulting and trading systems.

Market Data

On the market data side, the SSE Infonet business of the Shanghai Stock Exchange launched in Q2 2006 a new level 2 market data feed with a new stringent business model for the exchange data industry. The Hong Kong Exchange (HKEx) and SSE Infonet have now agreed to distribute each others’ market data feeds for cross-listed and specifically selected stocks. Similarly, the Tokyo Stock Exchange and the New York Stock Exchange have agreed to a cross-continental distribution of some of their data.

Another hot topic within the Asian exchange industry is the merging of separate exchanges for cash products, financial derivatives and commodities derivatives, with all the implications of such moves for products and technology.

Last but not least, the expectation of cross-country exchange mergers and alliances has been fuelled by a recent flurry of (often vague) memoranda of understanding between several exchanges in Asia and European and US exchanges wishing to create a presence in Asia.

The activities among Asia’s exchanges in 2006 and early 2007 are only the tip of the iceberg. Stay tuned…

Stephan Stadelmann is a founding partner  of FINETIK Partners.
http://www.finetik.com

Filed under: Asia, Australia, China, Data Vendor, Exchanges, FiNETIK Articles, FIX Connectivity, Hong Kong, India, Japan, Korea, Library, Malaysia, Singapore, Thailand, Trading Technology, Vietnam, , , , , , , , , , , , , , , ,