Alasdair Haynes, CEO of ITG International provides an industry view:
The recent announcement that the Tokyo Stock Exchange (TSE) had bought a significant stake in the Singapore Stock Exchange (SGX) prompted widespread speculation on M&A activity amongst Asian stock exchanges. This situation has clear similarities with the European landscape in late 2004 when the news of Deutsche Boerse’s initial bid for the LSE hit the wires.
Many comparisons can be drawn between the recent announcements in Asia and the trend for stock exchange demutualisation and consolidation which started nearly ten years ago in the US and Europe. Encompassing many countries at different stages of evolution, language, timezone and regulatory factors alone make it almost impossible to ensure consistency. Nevertheless, what we are seeing is that technology is the key to uniting these differences.
What has taken years of development in other markets is now being achieved Electronic trading, algorithms and execution management systems are being made available to domestic investors as well as those global houses now building businesses in Asia.
The TSE, only two years ago experiencing significant issues due to poor technology infrastructure, is one of the exchanges now aiming to trailblaze for Asia. Clearly significant investment is essential, but if that occurs, as these countries are assuring the world they will, I believe that what we are seeing now in the Asian trading landscape is not so much a dj vu continuation of a pattern established in other markets, but more a sea-change that heralds wider impact.
The speed with which the trading markets are ‘catching up’ may soon level the global trading playing field, helping Asia shake off its reputation as an emerging market and become a world leader in this sector rather than a follower.