FiNETIK – Asia and Latin America – Market News Network

Asia and Latin America News Network focusing on Financial Markets, Energy, Environment, Commodity and Risk, Trading and Data Management

February 11, 2012 • 10:07 am 0

Hong Kong and Singapore as Asia´s Financial Gateways

Celent predicts a paradigm shift around access to Asia. There is likely to be two gateways, providing access to different Asian regions, with Singapore emerging as the preferred gateway to Southeast Asia and Hong Kong becoming the gateway to Mainland China.

In a new report, the third of a series looking at the financial markets in Hong Kong and Singapore, Celent aims to provide a comparative analysis of Asia’s two main financial gateways, focusing particularly on derivatives. Asia’s Tale of Two Cities: Hong Kong and Singapore as Financial Gateways begins by noting that Western governments have emerged from the financial crisis in a weakened state, with economic prosperity blunted by high unemployment and an emerging debt crisis. The question is no longer when or if we need to enter the Asian markets, but how to best think about the issues of accessibility, entering the market, developing products, and forming strategic partnerships. The fundamental question that needs to be asked now is: “Where do we go from here, Hong Kong or Singapore?”

Although the HKEx and SGX may not be the biggest derivatives players in Asia-Pacific, they tend to be the most accessible for segments located outside the region. Taking advantage of their geographic location, political climate, and internal strengths, these city-states are poised to become hubs for trading of Asia’s regional products while also being easily accessed by US traders via retail trading accounts.

There are several factors that are likely to continue to drive growth in the derivatives market. These include:

• A relatively muted response to regulating over-the-counter markets as compared with the US and Europe. The type of products that led to the financial crisis in the West are not widely established throughout Asia, and as a result, the regulatory structure governing OTC markets are unlikely to change significantly.

• Continued desire to manage foreign exchange risk.

• Continued enhancement of processes of structuring derivatives risk management policies.

“We are seeing changes in relation to access to Asia. Hong Kong is no longer destined to become the sole hub to Southeast Asia,” says Alexander Camargo, Analyst and coauthor of the report. “Inherent strengths in Singapore are making it an extremely attractive financial gateway. Both English and Chinese are frequently spoken in Singapore, making it an ideal cross-roads for East and West. Furthermore, Singapore is viewed by most Asian countries as a neutral party and less politically tied to China than Hong Kong. This is likely to entice Indian investors and even Japanese and Korean investors to Singapore’s shores.”

However, this does not mean that Hong Kong will recede as a major financial center in Asia. Hong Kong residents are often fluent in both English and Chinese; contract laws are strong; and there remain strong historical ties to the West. As a Special Administrative Region of the People’s Republic of China, Hong Kong has stronger political ties to China. Hong Kong has also been busy integrating its financial markets with mainland China. These factors make it likely that Hong Kong will become a key gateway to mainland China.

This report begins with an overview of each country’s financial infrastructure and regulations, providing an introduction to the countries’ various demand market segments, followed by a look at the main exchanges, HKEx and SGX. A summary of HKEx and SGX focuses on derivatives trading, providing a brief description of products offered, market access, alliances, and clearing on the exchanges. The report then looks at each country’s fixed income markets, OTC derivatives, and FX markets. It concludes with a discussion of market supremacy and also the countries’ ongoing efforts to improve market structure and access.

Source: Bobsguide, 10.02.2012

Filed under: Asia, China, Exchanges, Hong Kong, Indonesia, Japan, Korea, Malaysia, News, Singapore, Thailand, Vietnam, , , , , , , , , , , , , ,

November 19, 2011 • 12:50 am 0

LEI (Legal Entity Identifier) set to arrive in waves

A new system giving financial institutions standardized Legal Entity Identifiers (LEIs) will start to be phased in next year after an international organization finalizes new standards in January 2012.

LEI requirements for a Global Legal Entity Identifier (LEI) Solution May 2011
LEI industry progress and  recommendation July 2011

The Geneva-based International Organization for Standardization (ISO) is expected to approve a plan for LEIs at the beginning of next year, calling for them to consist of 20 alphanumeric characters. After that happens, the infrastructure is already in place to start issuing the IDs early in 2012, according to officials with the Securities Industry and Financial Markets Association.

“Assuming the standard is approved by early January, our expectations are that legal entities will be able to register in short order for an LEI,” said Tom Price, managing director and head of SIFMA’s technology, operations and business continuity planning group.

During the financial crisis, both regulators and institutions realized they did not have the information available to quickly address issues of counterparty risk. LEIs aim to change that by using a universal code that would allow counterparties to be easily identified.

The United States has provided much of the leadership behind the push for LEIs, but the concept enjoys broad support around the globe. The registering authority for LEIs will not come from any government, but rather from the Society for Worldwide Interbank Financial Telecommunications (SWIFT).

After the ISO finalizes the standard, the next step will be rule writing, which is already underway at the Commodity Futures Trading Commission with respect to swaps. Price said LEIs will be used first for swaps participants and then gradually adopted for transactions involving other types of assets until they are required for all trades.

David Strongin, who is also a managing director at SIFMA, said the U.S. will be the first country to require LEIs, but Hong Kong and Canada will likely follow fairly quickly. The European Union has committed to adopting LEIs as well, though it is unclear whether Europe will adopt the system all at once or phase it in country by country.

Strongin stressed, however, that there is a global consensus to move forward, even if not every nation and region mandates LEIs at the same time.

“The G20, both the finance ministers and leaders, have all endorsed this,” Strongin said. “From a very high level, you don’t see disagreement that an LEI is needed. I think everyone agrees that it’s an important tool to build the foundation for risk management.”

Strongin said that while many traders might not see it right now, most firms are currently working hard to prepare for LEIs. Eventually, however, the changes will touch every facet of the industry. ”There’s a lot of work going on, though there’s only so much you can do until you see the final rules,” Price added.

Source: Traders Magazine, 18.11.2011

Filed under: Data Management, Reference Data, Risk Management, Standards, , , , , , , , , , , , ,

November 1, 2011 • 9:01 am 2

China & Brazil: Shanghai Stock Exchange and BMF&BOVESPA launch all-round cooperation

The 2nd China-Brazil Capital Markets Forum, jointly sponsored by the Shanghai Stock Exchange (SSE) and BM&F BOVESPA, was held on 27 October in Shanghai. SSE President Zhang Yujun said that the SSE would cement all-round cooperation in the capital markets of both sides with BM&F BOVESPA.

Marcos Caramuru, Ambassador of the Consulate General of Brazil in Shanghai, and Edemir Pinto, CEO of BM&F BOVESPA attended the forum presided over by Zhou Qinye, SSE Chief Accountant.

This February, Zhang Yujun, SSE Vice President Xu Ming and their entourage participated in the 1st China-Brazil Capital Markets Forum held in Brazil and signed a memorandum on closer cooperation with BM&F BOVESPA. Both sides fixed upon negotiation to hold the 2nd China-Brazil Capital Markets Forum in China in late October, 2011.

At the forum held in Shanghai, both sides compared notes on the intensification of cooperation and exchanges in China-Brazil Capital Markets and the in-depth development of the exchanges in the two countries under the new backdrop. Besides, special sub-forums were held to respectively discuss the opportunities for and internationalization of enterprises in emerging markets, the challenges and opportunities of emerging markets for investment in multinational capital markets and the practices and experience in the investor education and protection.

According to the cooperation memorandum signed previously, both sides reached an intent of cooperating in information, exchange, product development, trading platform construction, mutual personnel dispatch. Besides, both sides had common views on the periodical visit mechanism of senior managers as well as the exchanges in bond, fund, information, technology, investor education, academic science and personnel dispatch.

Zhang Yujun said at the forum that with the rapid growth of Chinese economy in recent years, the two countries had seen a good trend of economic cooperation. In the South America, China had become the biggest source of capital flowed as FDI into Brazil. All this would require the domestic financial industry, especially all the participants in the capital market, to provide better financial services and supporting services for further opening-up of the Chinese economy. The cooperation between the SSE and BM&F BOVESPA should be cemented in response to the new trends of the economic growth and capital market development in the two countries.

Finally, Zhang said that after the 1st China-Brazil Capital Markets Forum, more and more exchanges in the domestic capital market strengthened the cooperation with all the participants in the Brazilian capital market. For instance, a participant in the Brazilian capital market directly invested in the IPO of CITIC Securities in Hongkong. In the future, more domestic securities companies and fund management companies will provide financial services for Chinese enterprises’ investment in foreign capital markets.

Source: MondoVision, 31.10.2011

Filed under: Brazil, China, Data Management, Exchanges, News, Trading Technology, , , , , , , , , , , , , , , , , ,

October 19, 2011 • 9:16 am 0

Brazil: BM&FBOVESPA – News October 2011 – Nr.21

BRIC exchanges announce alliance

The exchanges of the BRIC emerging markets bloc announced a joint initiative on October 12, during the 51st AGM of the World Federation of Exchanges (WFE) in Johannesburg, to offer investors access to their dynamic economies. Initially the exchanges – which accounted for over 18% of all exchange-listed derivative contracts traded by volume worldwide as of June this year – will cross-list benchmark equity index derivatives on the boards of other alliance members. Following this, the alliance will develop innovative products to track the BRIC exchanges.

The seven exchanges are:

  • BM&FBOVESPA – Brazil
  • MICEX – Russia
  • RTS – Russia
  • Hong Kong Exchanges and Clearing Limited (HKEx) – China
  • Johannesburg Stock Exchange (JSE) – South Africa
  • The National Stock Exchange of India (NSE) – India
  • BSE Ltd (formerly known as Bombay Stock Exchange) – India

These seven exchanges represent a combined listed market capitalization of USD9.02 trillion, equitymarket trading value/month of USD422 billion and 9,481 companies listed.

BM&FBOVESPA new trading hours

In view of the start of daylight saving time on October 16, 2011, since October 17, 2011, the new trading hours (Brasília Time) for the BM&FBOVESPA markets – BOVESPA and BM&F segments – will be as follows:

Regular session: 11:00 a.m. – 6:00 p.m.

- After-Market: 6:30 p.m. – 7:30 p.m. (pre-opening phase to trading phase);

- Blocking / Exercise on the stock options market
Days prior to expiration: 11:00 a.m. – 5:00 p.m. (exercise of holder position).
Expiration date: 11:00a.m. – 12:30 p.m. – trading of the expired series to the offset of the position, that is, the sale for the holder of the position and purchase for blocking for the writer of the position / 12:30 p.m. – 2:00 p.m.: exercise of the holder position;

- Blocking / Exercise on the Index Options Market:
Days prior to expiration: 11:00 a.m. – 2:00 p.m. (exercise of holder position).
Expiration date: 11:00 a.m. – 2:00 p.m. – trading of the expired series to the offset of the position, that is sale for the holder of the position and purchase for blocking for the writer of the position / After 6:00 p.m. – automatic exercise of the expired series which fit the following situations: call option (settlement index higher than the exercise price; and put option (settlement index lower than the exercise price).

- Over-the-Counter Market: 11:00 a.m. – 6:00 p.m.

> Complete information of the new trading hours (Circular Letters 009-2011-DO-Ofício Circular)

The trading hours for the BOVESPA and BM&F segments are available at this link

Market Makers for Options on the Stock of Banco Bradesco, Gerdau and Banco do Brasil

BM&FBOVESPA announced on August 3rd the start of the bidding process to select up to three market makers for options on stock of Banco Bradesco S.A. (BBDC4), Gerdau S.A. (GGBR4) and Banco do Brasil S.A. (BBAS3). This is the third stage of the Competitive Bidding Process to select market makers in equity options and BOVESPA Index (Ibovespa) options, developed by BM&FBOVESPA. The institutions (including nonresident) that wish to participate have until November 29, 2011 to deliver proposals and the winners will be announced on December 14, 2011.

> More info

Market Makers for Options on Ibovespa and on Stocks of BM&FBOVESPA and Usiminas

BM&FBOVESPA announced on October 11 the winning institutions in the second selection process for market makers for options on stocks and on the BOVESPA Index (Ibovespa). The market maker obligation shall last twelve (12) months as of December 12, 2011. Banco Citigroup Global Markets Limited, Banco Itaú BBA S.A. and Timber Hill LLC shall be market makers for options on the BOVESPA Index (IBOV), complying with a maximum volatility spread of half a percentage point (0.5%). The institutions selected for options on stocks in BM&FBOVESPA S.A. (BVMF3) were Citadel Securities LLC, Citigroup Global Markets Limited and Morgan Stanley Uruguay Ltda, which shall be market makers complying with a maximum volatility spread of four percent (4%). Meanwhile, the institutions selected for options on stocks in Usinas Siderúrgicas de Minas Gerais S.A. (USIM5) were Banco BTG Pactual S.A. and Morgan Stanley Uruguay Ltda, which shall be market makers complying with a maximum volatility spread of twenty percent (20%).

> More info

Options on OGX Petróleo and Itaú Unibanco rise with Market Maker activity

The trading volume for options on the stocks of OGX Petróleo and Itaú Unibanco rose significantly in September, strongly influenced by the fact that they have had Market Makers since September 9. The Exchange launched the Market Maker program for stocks this year in order to encourage trading in options and increase their liquidity, as well as to stimulate longer expiries on these contracts. Options on the stocks of OGX Petróleo and Itaú Unibanco now have three Market Makers.

Comparing the average daily volume in September to that of January to August, there were the following increases: OGX Petróleo ON 51.9% (BRL 13.7 million against BRL 20.8 million) and Itaú Unibanco PN 205.6% (BRL 1.7 million against BRL 5.1 million).

ETF financial volume more than doubles in the past two months

BM&FBOVESPA Exchange Traded Funds (ETFs) reached BRL 1.4 billion financial volume in August and September, at 78,809 and 75,740 trades respectively. This is more than double the BRL 668 million financial volume and 31,997 trades in July.

Common Shares in Desenvix Energias Renováveis start trading on BOVESPA MAIS

The shares of electricity company Desenvix Energias Renováveis S.A. begin to be traded on October 3 on the BOVESPA MAIS segment of the BM&FBOVESPA Organized OTC Market, under the DVIX3M ticker symbol.

USD11 billion in public offerings and follow-ons in 2011

In the year to October, 15, BM&FBOVESPA registered USD11 billion in public offerings and follow-ons. There were eleven Initial Public Offerings (IPOs) in 2011: AREZZO&CO (ARZZ3), SIERRA BRASIL (SSBR3), AUTOMETAL (AUTM3), QGEP PART (QGEP3), IMC HOLDING (IMCH3), TIME FOR FUN (SHOW3), MAGAZINE LUIZA (MGLU3), BR PHARMA (BPHA3), QUALICORP (QUAL3), TECHNOS (TECN3) and ABRIL EDUCAÇÃO (ABRE11).

BM&FBOVESPA on Twitter

BM&FBOVESPA launched its Twitter account in English last week. Please access this link

2011 EVENTS

 The World Cup of ETFs and Indexing Latin America

BM&FBOVESPA is lending its support to the World Research Group’s “World Cup of ETFs and Indexing Latin America.” The event aims at providing attendees with the best practices for ETF use, as well as a comprehensive analysis of market structure, regulations and current and future opportunities. The expected audience includes pension funds, hedge fund managers and investors, investment advisors, financial consultants, and other market participants. A BM&FBOVESPA representative will talk about the Exchange’s ETF products.

Location: São Paulo (TBC)
Date: October 17-18, 2011.
> Full Agenda and Registration

2nd FX Growth Markets Series: Brazil – Profit & Loss

BM&FBOVESPA will join the Profit & Loss FX Growth Markets conference on October 20, 2011 at the Tivoli Hotel in São Paulo. Profit & Loss has been operating its highly successful series of Forex Network and FX Growth Markets conferences for more than 10 years, with regular annual events held in London, New York, Chicago, Singapore, Brazil, Mexico, Colombia, Chile, Shanghai and Toronto, and comes to Brazil for the second time. A BM&FBOVESPA representative will talk at the event.

Location: Tivoli Hotel São Paulo, São Paulo, Brazil
Date: October 20, 2011.
> Full Agenda

2nd Brazil–China Capital Markets Forum

BM&FBOVESPA and the Shanghai Stock Exchange are coordinating the Second Brazil–China Capital Markets Forum. This event follows the First Brazil–China Capital Markets Forum, which occurred in February in São Paulo, Brazil. At the event, the Shanghai Stock Exchange shall bring 300 to 500 Chinese asset and insurance managers and representatives of listed companies.

Location: Xijiao State Guest House Shanghai, China
Date: October 27, 2011.

Volumes and trades by Direct Market Access (DMA)

BM&F Segment
In September, BM&F* market segment transactions carried out through order routing via Direct Market Access (DMA) registered 35,144,357 contracts traded and 4,311,865 trades. In August, the volume reached 41,417,494 contracts traded and 4,431,750 trades.

The volumes registered by each access modality in the BM&F segment were as follows:

  • Traditional DMA – 12,583,334 contracts traded, in 1,366,264 trades, in comparison to 17,540,231 contracts and 1,306,241 trades in August;
  • Via DMA provider (including orders routed via the Globex System) – 13,976,949 contracts traded, in 374,992 trades, compared to 14,088,756 contracts and 435,281 trades in August;
  • DMA via direct connection – 2,636 contracts traded in 447 trades, against 4,210 contracts and 830 trades in August;
  • DMA via co-location – 8,581,438 contracts traded, in 2,570,162 trades, compared to 9,784,297 contracts and 2,689,398 trades in August.

In September, transactions carried out by foreign investors presented by CME to BVMF (who use the Globex-GTS order routing system or access BVMF markets via co-location) totaled 4,685,186 contracts traded, in 1,164,510 trades, compared to 5,308,308 contracts and 1,235,349 trades in August.

BOVESPA Segment
In September, order routing via DMA in the BOVESPA* segment totaled BRL 111.41 billion and 14,298,483 trades, from BRL 138.52 billion and 17,021,408 trades the previous month.

Trading volumes per type of DMA in the BOVESPA segment:

  • Traditional DMA – Volume of BRL 95.77 billion and 11,763,618 trades from BRL 120.45 billion and 14,098,638 in August;
  • DMA via co-location – Volume of BRL 14.29 billion and 2,357,270 trades from BRL 16.69 billion and 2,755,498 in August;
  • DMA via provider – Volume of BRL 1.34 billion and 177,044 trades from BRL 1.37 billion and 167,272 in August.

* Direct access to the BM&FBOVESPA market segments is carried out through DMA models 1, 2, 3 and 4. In model 1 or traditional DMA, the client accesses the GTS or Mega Bolsa through technological intermediation of a brokerage house. In model 2 or via DMA provider, the client does not use the technological intermediation of a brokerage house, but rather connects to the system through an authorized access provider. DMA via order routing with CME Globex is also a form of DMA model 2. In model 3, the client connects to the system through a direct connection. In model 4 or via co-location, the client installs its own computer within the Exchange’s facilities.

Notes:

The volumes registered by access modality include both buy and sell sides of a trade.

The volumes by access modality for both the BM&F and the BOVESPA market segments have been reported in a consolidated manner in the BM&FBOVESPA statements since May 2009.

MARKET RESULTS

BM&F Segment September 2011

Derivatives markets in the BM&F segment (including financial and commodities derivatives) totaled 59,365,524 contracts and BRL 4.35 trillion in volume in September, compared to 78,606,873 contracts and BRL 5.23 trillion in August. The daily average of contracts traded in the derivatives markets in September was 2,826,930, in contrast to 3,417,690 in August. Open interest contracts ended the last trading day of September with 36,620,797 positions, compared to 37,821,302 in August.

BOVESPA Segment September 2011

In September 2011, the equity markets (BOVESPA segment) financial volume totaled BRL 131.437 billion, in 13,551,487 trades, with daily averages of BRL 6.25 billion and 645,309 trades. In August, financial volume totaled BRL 177.906 billion, the total number of trades 16,234,673, and the daily averages BRL 7.73 billion and 705,855 trades respectively.

Source: BM&FBOVESPA, 18.10.2011

Filed under: BM&FBOVESPA, Brazil, China, Events, Exchanges, Hong Kong, India, Risk Management, , , , , , , , , , , , , , , , , , , , , , , , , ,

October 15, 2011 • 11:03 pm 0

Brazil: BRIC exchanges form alliance

The exchanges of the Brics emerging markets bloc have announced plans to form an alliance in cross-listing and to expose foreign investors to their dynamic economies and to increase the liquidity of their trading venues (Brazil, Russia, India, Hong Kong (China), South Africa)

This initiative was announced at the 51st AGM of the World Federation of Exchanges (WFE) in Johannesburg.

The initiative brings together BM&FBOVESPA from Brazil, MICEX from Russia (currently merging with RTS Stock Exchange), Hong Kong Exchanges and Clearing Limited (HKEx, China) and Johannesburg Stock Exchange (JSE) from South Africa. The National Stock Exchange of India (NSE) and the BSE Ltd (India) have signed letters of support and will join the alliance after finalizing outstanding requirements.

At the first stage of this project the exchanges will begin cross-listing of financial derivatives on their benchmark equity indices. It is planned to launch cross-listed products by June 2012.

“Global investors are increasingly seeking exposure to leading developing markets,” says Ronald Arculli, chairman of HKEx and of the WFE. “Thanks to this alliance, investors will gain easier access to major equity index derivatives of the BRICS markets which will now be offered in local currency on the alliance exchanges”.

This is an important milestone in the history of developing countries, continues Mr Arculli. “The alliance enables more investors to gain exposure to the emerging economies of the BRICS group whose economic power is on the rise. From a global perspective this alliance highlights the growing significance of the BRICS economies and financial markets for the coming decade, and further underlines the importance of enhancing cooperation between the BRICS members”.

At the second stage of the project members of the alliance plan to jointly develop new products for cross-listing on their exchanges. “In addition to measuring market performance, equity indices may be used as underlying assets to create new products, which can be the next step in the alliance development”, says Russell Loubser, CEO of the JSE.

“The products designed at the second stage would then be cross listed and traded in local currencies,” says Edemir Pinto, CEO of BM&F BOVESPA. “They will also ensure easy access for investors to other emerging markets through locally listed products.”

The third stage may include further cooperation in joint products design and new services development.

“Apart from cross-listing products, there are other opportunities for growth and development within this alliance. For example, creation of joint products combining various underliers which will facilitate liquidity growth in the BRICS markets and improve the understanding of other developing markets by local investors,” says Ruben Aganbegyan, President of MICEX.

All the partnering exchanges estimate the potential for cooperation created by this alliance very positively.

“The BRICS exchanges alliance has a great potential as it will create avenues for Indian investors to diversify their portfolios and expand into other emerging markets. It will also provide unique opportunities to investors in other BRICS nations to participate and contribute in India’s growth. BSE will actively work towards bringing world-class products to India as well as developing new products for other BRICS markets.” says Madhu Kannan, CEO of BSE Ltd.

Interest towards the BRICS markets is supported by the above-average growth forecast for these regions, as well as the rising consumer power generated by growing middle classes in each of the participating economies” says Ravi Narain, MD of the National Stock Exchange of India.

According to the WFE these six exchanges represent a combined market capitalization of USD 9.02 trillion, the number of their ussuer companies totals 9.5 thousand.

As per the research by the Futures Industry Association these six exchanges accounted for 18% of the global turnover in financial derivatives in H1 of 2011.

Source: BM&FBOVESPA, FinExtra, 12.10.2011

Filed under: BM&FBOVESPA, Brazil, China, Exchanges, Hong Kong, India, News, , , , , , , , , , , , , , ,

August 2, 2011 • 10:08 am 0

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, , , , , , , , , , , , , , , , , , , , , , , , , , , ,

March 30, 2011 • 9:45 pm 0

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, , , , , , , , , , , , , , , , , , , , , , , , , , , ,

October 4, 2010 • 10:24 pm 0

Metabit -Asia’s Trading Hub- Rebrand Marks 10th Anniversary

Metabit is celebrating its tenth anniversary in Tokyo on the 6th October 2010.  In acknowledgement of this milestone, the company which specialises in intuitive institutional trading platforms, exchange connectivity and a well established trading community, has commissioned a new corporate identity, website and advertising campaign.  These are to be launched at The FPL Japan Electronic Trading Summit 2010 on 6th October.

Daniel Bürgin, CEO of Metabit commented:

“We wanted to bring home to our clients and the market at large that our systems have been built out of Asia, for Asia.  It was important to demonstrate our intimate knowledge and understanding of Asian markets.“

“Metabit’s new brand image had to not only represent our commitment to Asia, but demonstrate our unique approach to client solutions and innate dynamism.  Our new positioning, Think Asia, Trade Asia, was developed to convey who we are and our area of speciality.”

A new advertising campaign will also be launched at the conference.  Metabit’s Metamorphosis Campaign, which features a butterfly with a map of Asia superimposed upon its wing, was chosen to symbolise the way in which the company operates. Bürgin continues:

“We wanted an original look that represents our approach. The metamorphosis theme was chosen to reflect the way we help clients transform and develop their business, enabling them to trade effortlessly and efficiently.”

Metabit has four offices in Japan, Australia, Hong Kong and Mainland China.  For more information about Metabit, visit www.meta-bit.com or see the company at Stand 9 at the FPL Summit in Tokyo.

For more information, contact Claus Kwon on +852 3752 0674 or Kenichi Morita on +81-3-3664-4160 or mail to sales@meta-bit.com .


 MetabitAd(LowRes).jpg

Filed under: Asia, Australia, China, FIX Connectivity, Hong Kong, Japan, Market Data, News, Trading Technology, , , , , , , , , , , , , ,

July 16, 2010 • 9:12 pm 0

Brazil Investment Summit, Hong Kong Nov 30/Dec 1, 2010

FinanceAsia and AsianInvestor are pleased to announce that the inaugural Brazil Investment Summit will be the second event in our Spotlight on Emerging Markets series. The previous event, the Russia- Capital Raising and Investment Summit, was held in Hong Kong in April and attracted more than 300 delegates.

Throughout the economic crisis, Brazil was a case study for success; its economy remained stable while other nations foundered. As it leads Latin America out of recession, where should Asian investors look in Brazil for value?

This inaugural summit will gather Asian financial market participants exploring investment possibilities in Brazil, attendees include:

  • Asian Institutional investors looking to put money to work in Brazil
  • Deal facilitators, including investment bankers and business brokers
  • Asian/Chinese corporates looking at M&A opportunities
  • Alternative investment funds, including private equity and hedge funds
  • Brazilian corporations looking to raise capital in Asia
  • Commercial banks
  • Sovereign wealth funds
  • Insurance companies
  • Central banks
  • Investors in commodities and natural resources
  • Service providers, including consultants, law firms, and accounting firms
    		•
    For more information about the Brazil Investment Summit, please contact:
    Speaker/Delegate queries:
    Laura Brody, Conference Producer
    (+852) 3175 1917
    laura.brody@financeasia.com    		 Sponsorship queries:
    Kar Wee Ang, Conference Sponsorship Manager
    (+852) 2122 5233
    karwee.ang@financeasia.com
    www.financeasia.com/brazil

    Filed under: Asia, Banking, Brazil, Events, FiNETIK Events, Hong Kong, Latin America, News, Services, Wealth Management, , , , , , , , ,

    July 6, 2010 • 9:51 pm 0

    China Property Market Beginning Collapse That May Hit Banks, Rogoff says

    July 6 (Bloomberg) — China’s property market is beginning a “collapse” that will hit the nation’s banking system, said Kenneth Rogoff, the Harvard University professor and former chief economist of the International Monetary Fund.

    As China’s economy develops, “especially at the speed it’s growing, it’s going to have bumps,” said Rogoff, speaking in an interview with Bloomberg Television in Hong Kong. He also said that while recoveries across the global economy are “very slow,” the danger of a return to recession isn’t “elevated.”

    Rogoff’s concern echoes that of investors, who sent China’s benchmark stock index to its worst loss in more than a year last week. China’s data have been a focus because the nation has led the global recovery from the worst postwar recession.

    Chinese authorities have this year been trying to cool the economy as it expanded at an 11.9 percent annual pace in the first quarter, and to reduce property-market speculation. The central bank has told lenders to set aside more money as reserves, and targeted a 22 percent cut in credit growth at banks this year, to 7.5 trillion yuan ($1.1 trillion).

    The efforts have contributed to a slump in real-estate sales, while prices continue to climb. The value of property sales dropped 25 percent in May from the previous month.

    “You’re starting to see that collapse in property and it’s going to hit the banking system,” Rogoff said today. “They have a lot of tools and some very competent management, but it’s not easy.”

    Growth Outlook
    Goldman Sachs last week cut its growth forecast for China this year to 10.1 percent from 11.4 percent because of the government’s monetary tightening measures.
    Rogoff also said it’s unrealistic to expect China to continue growing its exports to the rest of the world “at the pace it’s been doing.”

    “It’s impossible. At some point they have to redirect their strategy” for economic growth, he said.

    For your info:
    1) About one third of the total bank lending (about 40 trillion) is in real estate sector in China.
    2) Most of the bank lending has used land and real estate properties as collateral.

    Source: Bloomberg, 06.07.2010

    Filed under: China, News, Risk Management, Services, Wealth Management, , , , , , , , , ,

    June 13, 2010 • 11:44 pm 0

    China: The collapse of the Asian growth model

    Over the last three decades there has been a dramatic shift in the stance of development policy with import-substitution being replaced by the export-led growth. A significant concern with this latter model is that it may risk turning global growth into a zero-sum game. This can happen if one country’s export growth comes by poaching of domestic demand elsewhere or by displacing exports of other countries.

    China on ‘Treadmill to Hell’ Amid Bubble, Chanos, Faber, Rogoff Say

    Rather than focusing on production for domestic markets, countries were advised to focus on production for export. This shift away from import-substitution toward the export-led growth was driven significantly by the economic troubles that emerged in the 1970s. At that time many developing countries, who had prospered under regimes of import-substitution, began to experience slower growth and accelerated inflation.
    This led to claims that the import-substitution model had exhausted itself, and that the easy possibilities for growth by substitution had been used up.second factor fostering adoption of the export-led model was the shift in intellectual outlook amongst economists in favor of market directed economic activity. Import-substitution requires government provided tariff and quota protections, and economists increasingly came to portray these measures as economic distortions that contribute to productive inefficiency and rent seeking.
    The shift in policy stance was also propelled by the empirical fact of Japan’s spectacular success in growing its economy in the twenty five years after World War II, and by the subsequent growth success of the four east Asian “tiger” economies – South Korea, Taiwan, Hong Kong, and Singapore. All of these economies relied on increased exports.

    The problem is that the export-led growth model suffers from a fallacy of composition whereby it assumes that all countries can grow by relying on demand growth in other countries. When the model is applied globally in a demand-constrained world, there is a danger of a beggar-thy-neighbor outcome in which all try to grow on the backs of demand expansion in other countries, and the result is global excess supply and deflation. In this connection, it is not exporting per se that is the problem, but rather making exports the focus of development. Countries will still need to export to pay for their imported capital and intermediate goods needs, but exporting should be organized so as to maximize its contribution to domestic development and not viewed as an end in itself.
    Export led growth model prompts countries to shift ever more output onto global markets, and in doing so aggravates the long-standing trend deterioration in developing country terms of trade. This pattern partakes of a vicious cycle since declining terms of trade and falling prices compel developing countries to export even more, thereby compounding the downward price pressure. This vicious cycle has long been visible for producers of primary commodities. However, as a result of the transfer of manufacturing capacity to developing countries who lack the consumer markets to buy their own output, the same process may now be present in all but highest-end manufacturing.
    In the 1950′s, Western opinion leaders found themselves both impressed and frightened by the extraordinary growth rates achieved by an Eastern economy, although it was still substantially poorer and smaller than those of the West.
    The speed with which it had transformed itself from a peasant society into an industrial powerhouse, and it’s perceived ability to achieve growth rates several times higher than the advanced nations, seemed to call into question the dominance not only of Western power but of Western ideology.
    The leaders of that nation did not share Western faith in free markets or unlimited civil liberties. They asserted with increasing self-confidence that their system was superior: societies that accepted strong, even authoritarian governments and are willing to limit individual liberties in the interest of the common good, take charge of their economies, and sacrifice short-run consumer interests for the sake of long-run growth that would eventually outperform the increasingly chaotic societies of the West.
    China’s economic growth has averaged 9pc a year over the past 10 years, compared with a paltry 1.9pc for the British economy. Last year, despite the credit crunch, China posted a remarkable growth rate of 10.7pc against a British contraction of 3.2pc.some are extrapolating present trends forward, and proclaiming that China will usurp the United States as the world’s largest economy.
    However, in the absence of expanding foreign demand for its exports, it has instead come to rely on a massive surge in domestic bank lending to fuel its growth rate. When measured relative to the size of its economy, the 27pc point jump in bank loans to GDP is unprecedented; at no point in history has a nation ever attempted such an incredible increase in state-directed bank lending.
    This appetite for cheap Chinese exports, which had at one point seemed insatiable, means that the West has come to owe China over 2 trillion $. China has become the world’s biggest creditor, but creditor nations running persistent trade surpluses has two historical examples. The US economy in the Twenties and the Japanese economy in the Eighties.
    In both of the previous examples a failure to allow exchange rates to adjust to the new reality created a large speculative pool of credit that, in turn, led to overvalued domestic assets and, eventually, an economic crisis.
    The banks in China are lending money at breakneck speed, but China’s state planners have favoured investment over consumption. High-speed rail networks, first-class infrastructure projects and the urban migration of 55 million people every year are common explanations for the ability of the nimble Chinese to overcome the frailties of this global economy. But the goal of economic policy, is to maximise households’ wellbeing and consumption. Unfortunately, and China’s share of consumption within its economy has fallen relentlessly, reaching 35pc of GDP in 2008.
    In China, investment spending has tripled since 2001 and the consequences are staggering. A country that represents just 7pc of global GDP is now responsible for 30pc of global aluminum consumption, 47pc of global steel consumption and 40pc of global copper consumption. The overriding problem is that the Chinese model leads to a deflationary spiral that is perpetual in nature. Domestic consumption never grows fast enough to absorb the supply, prompting the planners to commit to ever-higher levels of investment. Over-capacity inevitably plagues many sectors of the economy and Chinese profitability is already low.

    The story in China has been one of imperiled, marginally profitable enterprises relying on generous state-provided incentives for utilities, credit, etc. now having to deal with slowing global demand. The drying up of trade finance isn’t helping, either. The giant stimulus worldwide, and especially in China, helped the world economy for one year but that has now dried up.

    Source and full article at  Israel Financial Experts, 08.06. 2010,

    Filed under: Asia, China, Energy & Environment, Hong Kong, News, Risk Management, , , , , , , , , , , , , , , , , , , , ,

    May 19, 2010 • 2:47 am 0

    MetaBit Trading Technology and Services opens Hong Kong Office

    Tokyo/Hong Kong, 18 May 2010 – Specialist DMA and exchange connectivity solution provider MetaBit opens its Hong Kong office in May 2010 as part of its business expansion in Asia.
     
    The new Hong Kong office represents a further strategic milestone for MetaBit to accelerate the expansion of its rapidly growing Asian client base and support its strategic objective to service Asia’s financial markets with localized and low latency trading solutions.  The Hong Kong office will promote and support institutional DMA, algo and manual trading across fourteen Asian markets.
     
    MetaBit have also announced the appointment of Claus Kwon as managing director for the Asia Pacific ex-Japan business.
     
    “I am very pleased to have Claus Kwon taking responsibility to further expand MetaBit’s business outside Japan” says Daniel Burgin, CEO at MetaBit.  “With Mr Kwon’s appointment, MetaBit continues to proactively build on its success and reputation earned through the quality of its technology and MetaBit’s continuous efforts in helping its clients achieve greater trading efficiency. Headquartered in Tokyo, our company is firmly rooted in Asia.  The addition of the Hong Kong office strengthens MetaBit’s ability to deliver the best solution with service catered for local needs.”
     
    “I am excited to be joining MetaBit as their business expands in the region and as electronic trading continues to develop at an incredible rate in Asia,” says Mr Kwon. “MetaBit has a history of delivering innovative electronic trading solutions to both global and local clients in the Asia markets. Whilst MetaBit’s solutions are global by underlying technology, their unique infrastructure supports businesses that are serious about their Asia operations and want to stay competitive in this market.”
     
    Today, MetaBit covers all of Asia’s DMA and Algo markets through its flagship trading platform XiliX, its vendor neutral FIX hub MLH (Market Liquidity Hub), and Alpha, its ultra-low latency exchange connectivity solution.
    With the opening of a Hong Kong office, MetaBit – a pro-active promoter of the FIX Protocol – has formally joined the FPL.
     
    About MetaBit –
     
    MetaBit is a specialist low latency DMA trading solution provider in Asia reducing transaction processing times and  increasing trading opportunities by providing FIX enabled DMA and algorithmic trading access to market liquidity across fourteen Asia’s markets, including Japan.
     
    MetaBit’s flagship products are the XiliX™ intuitive buy side DMA trading platform and MLH, a vendor neutral Market Liquidity Hub. Other products are Alpha, ultra-low latency exchange connectivity to Japan’s exchanges and EXSiM – Japan exchange simulators.  All of MetaBit’s products are powered by the CameronFIX Engine.

    Source: Metabit, 18.05.2010

    Koji Ito
    +81-3-3664-4160
    sales@meta-bit.com

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

    March 12, 2010 • 11:24 am 1

    China: Governor of the Shanghai Stock Exchange (SSE) Geng corrects three Misunderstandings on International Board

    Geng Liang, member of the CPPCC National Committee and Governor of the Shanghai Stock Exchange (SSE), clarified ambiguous and incorrect assumptions in development of International Board in Beijing yesterday.

    According to Geng, the introduction of International Board would benefit both the development of domestic capital market and the building of Shanghai into an international financial hub and would by no means reduce itself into a global ATM machine as some concerned.

    Three Major Positive Effects of Int’l Board

    “The decision of listing eligible overseas companies on domestic market, or introducing International Board, is made based on the consensuses reached through the Sino-US strategic economic dialogues and Sino-UK economic and trade dialogues. For China’s capital market, the launch of International Board will bring about benefits in three aspects,” said Geng. First of all, the launch of International Board, a milestone in China’s opening-up of its capital market, offers domestic investors a new channel to purchase shares of large overseas companies with RMB, which is by all means a progress.

    Relevant insiders also hold that the opening of International Board is especially conducive to the investment in overseas enterprises by investors who are inexperienced in overseas investment and unfamiliar with foreign law and accounting systems.

    Besides, the development of International Board will exert positive influence on the construction of blue-chip market, thus promoting the growth of China’s capital market. “The ultimate goal of the SSE is to build a blue-chip market, which includes high-quality Chinese and foreign listed companies,” added Geng.

    Finally, International Board means a lot to building Shanghai into a global financial center. “The listing of overseas companies on domestic market will help pool human resources, capital and institutions to Shanghai,” noted Geng.

    No Possibility for “Int’l ATM machine”

    As to the concern about misusing International Board as “a global ATM machine”, Geng explained that under the arrangement that free exchange is forbidden under the RMB capital account, the A shares on the future International Board can’t be exchanged freely with the shares issued overseas. Thus, there is no possibility for “a global ATM machine”. Furthermore, “the large international companies, who apply for going listed on the SSE, have already got listed on overseas stock exchanges. Their listing on Chinese market is actually a behavior of refinancing. According to internationally accepted practices, the prices for refinancing generally shouldn’t exceed those on local secondary market.” Therefore, it is not qualified to be “a withdrawing behavior” in terms of scale.

    Geng also stated that the launch of International Board would not impact Hong Kong’s position as an international financial center. “The support to Hong Kong market instead of affecting its construction of international financial hub by the return of H shares to A shares is a case in point. During the 20 years’ development of China’s capital market, 60 domestic enterprises went listed in Hong Kong, which vividly proved that the development of domestic capital market boosted Hong Kong market and exchange.”

    Substantial Benefits of Int’l Board

    Insiders hold that the benefits of initiating International Board are substantial. Apart from those mentioned by Geng, there are at least five more major benefits.

    First, the new board will relieve the pressure from foreign exchange reserve, which accords with the development transition of national economy from capital attraction to technical, managerial and human resources introduction. Second, the new board will attract overseas natural resources and energy enterprises to get listed in China, thus helping break their capital barrier towards China’s capital by counteracting the increase in international commodity prices with equity income. Third, the new board provides a channel for Chinese investors to share the income from business conducted by multinational companies in China while changing the situation that multinational companies can only offer job opportunities to Chinese. Fourth, the corporate governance of domestic listed companies will be improved thanks to the model effect of overseas companies listed in China. Last but not least, the new board will help multinational companies integrate themselves with China’ economy to make greater contribution to the development of China’s economy.

    Source: MondoVisione, 11.03.2010

    Filed under: China, Exchanges, News, , , , , , ,

    February 2, 2010 • 11:30 am 0

    Santander starts marketing Latin American funds in Asia

    Banco Santander, a Spanish bank with a large presence in Europe and Latin America, has created a new role in Hong Kong to develop its asset-management business in Asia.

    With the necessary licences in place, Alexander de Laiglesia will concentrate on selling funds manufactured by Santander Asset Management in Latin America and Europe to Asian wholesale distributors and asset managers.

    De Laiglesia, a managing director, has been with the firm for 20 years, starting in Tokyo as a deputy branch manager. He returned to Japan from Madrid in 2002 with a secondment to Shinsei Bank. He moved to Hong Kong last year, and has been developing the asset-management role for the past several months. De Laiglesia has also worked in Hong Kong and the Middle East in the 1980s with Standard Chartered Bank, and he speaks Japanese.

    Santander pursues a universal banking model in its core markets of Spain, Portugal, the UK and the countries of Latin America, including Brazil, as well as the US. The bank has built investment teams in those countries.

    The group mainly provides local products to its local investors. It cross-sells some products to provide these local customers with international exposure and may also provide third-party funds. Worldwide, Santander Asset Management manages €120 billion ($168 billion) of assets.

    Asian markets are not core to this business. “We are not here to manage assets,” says de Laiglesia. “We are here to channel investments from Asia to our core markets.” That means competing in the niche of selling Latin America funds to Asian wholesalers and domestic fund houses. Santander will also seek to develop sales to institutional investors as well.

    “We are the largest regional asset manager in Latin America, with big investment teams in markets such as Brazil, Chile, Mexico and Argentina,” de Laiglesia says.

    Santander has already notched up business in Japan as adviser to a couple of Brazil equity funds launched by Daiwa Asset Management, and in Korea, where Industrial Bank of Korea sells a Latin America equities product. Japan, in particular, has wealth, its investors are comfortable with Brazilian securities and that’s an asset class where domestic asset managers do not have a local presence, de Laiglesia says.

    Santander is flexible with regard to the type of relationship it will pursue with Asian distributors; it may act as an investment adviser, a provider of white-label products or a provider of mutual funds from its Luxembourg range. The firm will also seek segregated mandates from or sales of its Luxembourg funds to Asian institutions.

    In addition to applying for regulatory licences, de Laiglesia is still researching which markets to focus on and which thematic products to highlight. Japan is the priority, but the region’s other large markets — Australia, Greater China, Singapore and South Korea — are also important.

    Source: AsianInvestor.net, 02.02.2010

    Filed under: Asia, Australia, Banking, Brazil, China, Colombia, Hong Kong, Japan, Korea, Latin America, Malaysia, Mexico, News, Peru, Services, Singapore, Wealth Management, , , , , , , , , , , , ,

    January 22, 2010 • 7:28 am 1

    HKEx And Shanghai Stock Exchange Agree On New Cooperation Initiatives

    Hong Kong Exchanges and Clearing Limited (HKEx) and Shanghai Stock Exchange (SSE) have met today to discuss the Closer Cooperation Agreement they signed in January of last year.  The agreement commits the two organisations to work together more closely towards the common goals of mutual prosperity and contributing to the greater development of China’s economy.

    “Through cooperation and exchanges with our friends at SSE, we can learn more about the behaviour and needs of Mainland investors and how we can further support the QDII (Qualified Domestic Institutional Investor) scheme,” said HKEx Chairman Ronald Arculli.  “We can also learn from each other about the market dynamics created by the growth and development of SSE and HKEx, and the latest market trends in the Mainland and Hong Kong.

    “According to an old Chinese saying, a single tree cannot make a forest,” Mr Arculli added.  “Jointly with our Mainland counterparts, we can accelerate China’s growth and financial development in a prudent manner.”

    As a result of recent discussions, HKEx’s Listing Division and SSE’s Company Management Department will establish a mechanism for regular exchanges, in order to more effectively regulate companies and securities listed in both Shanghai and Hong Kong and better protect shareholder interests.  Views will be exchanged every two months, with the focus on operational issues, including information disclosure by listed issuers.  The two organisations will take turns organising the meetings.

    HKEx and SSE also agreed to strengthen exchanges and cooperation on information technology that supports business development.  “The Shanghai and Hong Kong exchanges have their own technological advantages.  There is ample room for the technology personnel of both organisations to share expertise, and explore possible ways to develop our respective technology support infrastructure to accommodate further and broader cooperation between the two markets,” HKEx Chief Executive Charles Li said.

    In addition, HKEx and SSE have agreed to seek further cooperation in product development and to hold a forum on listed structure products later this year.

    Since signing the cooperation agreement in January last year, HKEx and SSE have also started a market data collaboration programme, shared information on the development of Exchange Traded Funds and other products, and arranged for HKEx executives to train at SSE and vice versa.

    HKEx believes its cooperation with SSE strengthens the two organisations’ positions in today’s rapidly changing financial market environment.

    The management of the SSE and HKEx met in Hong Kong on 21 January 2010.  The following joint statement was issued after the meeting.

    1. The management of the SSE and HKEx exchanged views and discussed their experiences regarding information sharing and cooperation in regulating companies and securities listed in both markets, market infrastructure development, product development, information service development, personnel exchanges, and so forth.

    2. Both sides agreed to strengthen information sharing and cooperation in regulating companies and securities listed in both markets.  With an increase in A+H share listings, as well as the development of Exchange Traded Funds (ETFs) on A shares and ETFs on Hong Kong stocks, closer ties between the Shanghai and Hong Kong markets have been fostered.  The SSE’s Company Management Department and HKEx’s Listing Division will set up a mechanism for regular exchanges, in order to more effectively regulate enterprises and securities listed in both markets and better protect shareholder interests.  An exchange of views will be held every two months, focusing on the operational issues in the regulation of securities listed in both markets and related information disclosure issues.  The two organisations will take turns organising the meeting.  The same mechanism may be extended to other departments, if proved effective.

    3. Both sides agreed to strengthen exchanges and cooperation regarding technology that supports business development.  Information technology development, particularly the development of trading and information dissemination systems, is crucial to the stock exchange business.  Exchanges and cooperation on technology issues between the two organisations can deepen mutual understanding of the merits of each market’s infrastructure and help further the markets’ business development.  The Shanghai and Hong Kong exchanges have their own technological advantages.  The SSE’s new generation trading system has cutting edge technology and advanced capacity, while HKEx’s systems support trading, clearing and information dissemination for a variety of products.  There is ample room for the technology personnel of both organisations to share expertise, and explore possible ways to develop the respective technology support infrastructure to accommodate further and broader cooperation between the two markets.

    4. Both sides agreed to strengthen cooperation in respect of the development of products.  ETFs have become the starting point of the two organisations’ cooperation on product development. At present, several Mainland fund management companies are actively making preparations for the issue of ETFs related to Hong Kong stocks.  It is hoped future cooperation on ETFs will be extended on a gradual basis to the development of ETFs on bonds and gold, as well as cross listings.  Besides ETFs, the two organisations may seek further cooperation in products such as securitised assets, warrants, Callable Bull/Bear Contracts and options.  The two organisations jointly participated in a forum on ETF market development last year and agreed to hold a forum in similar format on listed structured products later this year.

    5. Both organisations agreed to deepen cooperation in the development of information products.  For example, cooperation in compiling an index comprising securities listed in Shanghai and Hong Kong may be explored to increase the Shanghai and Hong Kong stock exchanges’ influence in the global market.

    6. Both organisations support continued exchanges and training involving their personnel.  The management of the two organisations agreed to meet twice a year to review the progress of exchanges and training, and work out plans for the next year’s exchanges and training.  The two organisations will take turns organising the meeting.  Training may take the form of meetings during which each side will be briefed on the other side’s market development, or short educational visits to each other’s offices.  Last year, the two organisations arranged for their executives to train in each other’s related departments, and agreed to continue the activities.

    Source: MondoVision, 21.01.2010

    Filed under: China, Data Management, Exchanges, Hong Kong, Market Data, News, Reference Data, Risk Management, , , , , , , , , , , , , , , , ,

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