Electronic Trading in Asia-Pacific: A Market by Market Update on the Dynamic Region

by Anshuman Jaswal, PhD, October 15, 2010
Industry Trends
Asia-Pacific

Abstract

The markets in the Asia-Pacific region exhibit high rates of economic growth and cover almost half of the global population. This makes Asia an attractive market for electronic trading.

In a new report, Electronic Trading in Asia-Pacific: A Market by Market Update on the Dynamic Region, Celent compares the present levels of electronic trading and the possibility of having high frequency trading (HFT) in equity markets in Australia, China, Hong Kong, India, Japan, Korea, Malaysia, Singapore, and Taiwan. While the overall Asian market is quite diverse, there has been a move towards greater efficiency. The result is that they are creating the infrastructure to improve levels of electronic trading.

 

“Asia is a very exciting market for electronic trading of cash equity and derivatives,” says Anshuman Jaswal, Celent Senior Analyst and author of the report. “While the level of development of each market differs, the leading exchanges in Japan, Australia, Singapore, Hong Kong, and India should set the tone, with faster matching engines, enhanced market data, and colocation services.”

With a high proportion of its domestic buy side beginning to use algorithmic trading, Hong Kong is best poised to grow in the region. It is followed by Singapore, where the regulatory environment is very conducive to algo trading. Similarly, Japan, and Australia are expected to have higher algo trading in coming years. Finally, India has been a slow starter but is rapidly catching up with some of its counterparts and is expected to have algo trading levels of around 30% by 2012.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

3

Introduction

5

Market Overview

7

 

Trends in Electronic Trading

7

Electronic Trading in Leading Equity Markets

21

 

Australia

21

 

China

23

 

Hong Kong

26

 

India

28

 

Japan

30

 

Korea

32

 

Malaysia

35

 

Singapore

37

 

Taiwan

39

Alternative Trading Systems

41

Electronic Linkages Between ASEAN Exchanges

43

Barriers to Algorithmic Trading in Asia

44

Problems with Algorithmic Trading

46

Regulatory Framework

48

Conclusion

49

Overall Rankings

51

Leveraging Celent’s Expertise

51

 

Support for Financial Institutions

51

 

Support for Vendors

51

Related Celent Research

52

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