Published On: Sat, May 11th, 2013

What Market is On Your Radar for 2013?

Question:
What Market is On Your Radar for 2013?
Purpose:
In the quest for risk weighted returns we wanted to see if there was some interest in the emerging markets in Asia namely Thailand, Indonesia, Philippines and Malaysia. Of course, the regional giants China and India, who have been struggling with export led economies and lowering growth forecasts whether these markets continued to be a destination for capital.
Results:
What Market is On Your Radar for 2013?

What Market is On Your Radar for 2013?

Analysis:
Identifying trends and trying to stay ahead of them are typical of any competitive business. While there are hundreds or even thousands of trends that could be indentified in Asia’s electronic trading industry we wanted to see what market in developing APAC people were focusing on for 2013.

We had expected China (21.43%) to rank first but instead was second to India with 28.57% of the votes. Perhaps some realise that accessing the number two economy continues to be difficult or that prospects have waned over the past year or so. Either way India and China at the top of the list weren’t much of a surprise and continue to be the focus for many industry participants.

Where our opinion poll becomes interesting are the remaining selections. Surprisingly, the Philippines ranked third with 19.05% of votes. There seems to be genuine interest of late in this market though still quite small trading just US$250 million per day. The Philippine Stock Exchange has made some investments in technology and is part of the ASEAN bloc.

Next came Thailand another ASEAN member with 16.67% indicating this was a country of interest for electronic trading. The SET Group has recently upgraded its matching engine and post trade apparatus and was the third member of the ASEAN Trading Link. There has been a push for algorithmic trading and derivatives at the exchange over the last two years and it would seem people are keen to access this market. Notional traded on the cash segment has more than doubled year on year.

Indonesia at 11.90% we thought was a bit low given that it is a sleeping giant in terms of demographics and the continued economic growth over the last decade. Some of the international sell sides have set up businesses recently even offering block crossing and the usual algorithms found in developed Asia. The exchange still has a fair way to go in terms of technology however and notional traded while up 25% is just US$500 million per day. Big up side here.
Lastly Malaysia came in at 2.38%. We were surprised by this low showing as Malaysia is pushing access through derivatives trading with Globex and investing in technology too. They were one of the founding members of the ASEAN Trading Link as well and have seen a spate of IPOs making this market a hot spot for capital raising.
At the end of the day it would seem 50% are looking at China and India and 50% are focused on ASEAN in developing Asia.

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