12.06.2011

Asian Markets Emerge

12.06.2011
Terry Flanagan

The Asian financial hubs will look toward further growth opportunities as investor interest in the region continues to rise.

“Asian exchanges are typically playing a more important role as global capital formation centers,” a Hong Kong Futures Exchange spokesman told Markets Media via email. “In Hong Kong, we are seeing increased interest from overseas companies in listing here. Just this year, Hong Kong hosted the IPO of Glencore (which dual-listed in Hong Kong and London), as well as the IPOs of Prada (Italy), Samsonite (U.S.), MGM China and Coach (U.S.). Foreign issuers are frequently attracted by higher valuations in Hong Kong, as well as our growing regional investor base, deep liquidity, visibility to Mainland customers and transparent and efficient listing regime.”

While traditional economies face increasing debt burdens and high unemployment, Asian economies have remained relatively robust. China is now the second largest economy in the world, with Japan close behind. This has led to tremendous wealth creation in the region which is felt in Asia’s financial markets.

The M&A and partnership activity seen in other regions have also occurred in Asia.

The parent company of the Hong Kong Futures Exchange, Hong Kong Exchanges and Clearing, recently entered into an alliance with exchanges from the BRICS economies in which index futures will be cross-listed on member exchanges. In addition, HKEx has entered into discussions with the Shanghai Stock Exchange and the Shenzhen Stock Exchange with a view to establish a joint venture company to be incorporated in Hong Kong. Currently the possible areas of business operation of the joint venture company include the development of index and other equity derivative products and the compilation of new indexes.

Market data and service provider CQG recently announced that they expanded to mainland China with the establishment of a Shanghai data center. Earlier this year, they had also established a direct market access connection for its clients to the Hong Kong Futures Exchange.

“We’re seeing a continuing, growing interest for these emerging markets,” said Mark Fischer vice president of product management at CQG. “Those markets seem to be younger in many ways than the European and North American markets. There’s a lot of growing interest, as people have more disposable income, many are trading on a full-time basis in a style of trading that we would call retail. The change we’re seeing is that the native population is interested in sophisticated western tools.”

Because of this, the company will look toward further growth in the region in 2012.

“We are actively looking to growth in Asia,” said Fischer. “Over the course of the next year, we expect increased market demand for new connections to other exchanges in the region.”

Related articles

  1. Swap Clearing Volumes Rise in Asia

    KKPS, the largest institutional broker in Thailand, has signed a multi-year agreement.

  2. The fund is part of a project led by the Monetary Authority of Singapore to bring real world assets on-chain.

  3. Buyside Dismisses Fears of Asian Financial Crisis

    APAC is the fastest growing region for listed derivatives trading volumes.

  4. Swap Clearing Volumes Rise in Asia

    The implementation centralizes the full global suite of investment tools.

  5. TSE will make a 5% investment into Blue Ocean.