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Tokyo Cheapest For Illiquid Securities – CMCRC

The Capital Markets Cooperative Research Centre (CMCRC) has released new analysis on relative costs of trading in Asia Pacific markets, showing Tokyo to be the cheapest place to trade illiquid securities.

In a new video, CMCRC CEO Professor Mike Aitken uses the Market Quality Dashboard (MQD) to compare the cost of trading in various markets. Comparing Hong Kong, Singapore, Tokyo, Australia and India, the analysis uses relative effective spreads to estimate the cost of demanding liquidity. In Australia, the cost of trading the least liquid group of stocks  is highest at 5,481 basis points (bps) on average, whereas in Tokyo it is only 144.43bps. This is cheaper even than NASDAQ where the lowest decile of their securities trades at an average of 281bps. Singapore came in at 2,749bps and Hong Kong  707bps. The cheapest place in the world to trade such securities is NYSE at 65bps.