.jpg)
In new equity markets research published today, TABB Group says US and European demand for electronic linkage to Association of Southeast Asian Nations (ASEAN) exchanges is strong and primed to expand, as seamless access will attract brokers already trading in other parts of Asia. However, there is a wide range of needs across the different market segment, including direct market access (DMA), low-cost versus real-time market data, advanced order types, and reliable trading platforms.
TABB’s senior analyst Kevin McPartland, who authored the ASEAN Equity Markets Pinpoint report, an industry update on equity trading in the ASEAN region covering the Indonesia, Philippines, Thailand, Vietnam, Malaysia and Singapore exchanges, says the global financial crisis had little impact on growing buy-side demand for trading in ASEAN markets.
“More seamless access will drive brokers already operating in other parts of Asia to begin trading in the ASEAN markets,” he says, with the sell side set to benefit most from that seamless access. Explaining that the availability of real-time market data is crucial for all trading in the ASEAN markets, and that real time data is a requirement for the sell side even when trade volumes are low or non-existent, he adds, “High costs and time zones do tend to limit buy-side market data usage outside of the region.”
Addressing the relationship between the buy side and sell side, McPartland says that although no single broker currently dominates across all Asian markets, over 90% of buy-side firms are unwilling to give brokers full discretion over their orders. However, while the buy side does look to their brokers for market access, they agree that more seamless access would lower costs for execution and market data. There is also significant support for the idea of central ASEAN execution venue, McPartland adds.
The report’s in-depth coverage includes 24 charts:- Support for a central ASEAN venue
- Improving ASEAN trading
- Sell-side interest in ASEAN linkage
- % of bulge-bracket participants trading in each market
- Impact of the financial crisis on ASEAN interest
- Roadblocks to sell-side trading in ASEAN markets
- Buy-side broker usage – all Asia ·
- Buy-side broker usage – ASEAN markets
- Top brokers by country (by # of mentions)
- Bulge-bracket participants trading in each market
- Mid-tier participants trading in each market
- Buy-side interest in a seamless ASEAN linkage
- Roadblocks to buy-side access of ASEAN markets
- Average number of buy-side orders per week
- Average blended commission rates (bps)
- % for which counterparty risk is an issue
- Importance of each component when trading in ASEAN markets
- Markets providing real-time market data to sell side
- Market data sources for sell side
- Markets providing real-time market data to buy side
- Reasons for buy side’s lack of market data
- How the buy side trades ASEAN markets
- % of buy side using multiple data providers ·
- Sell-side and buy-side market data providers
TABB Group collected data through interviews with heads of electronic trading from 12 top global broker-dealers, 9 hedge funds and 14 institutional asset managers. On the buy side, participants had combined global assets under management (AuM) of approximately $6 trillion and are currently trading in Asia from slightly under $10 million to over $5 billion monthly.
“ASEAN Equity Markets: A TABB Group Pinpoint,” the fourth in a series of research reports covering specific industry projections, can be downloaded by TABB Group Research Alliance Equity clients and pre-qualified media at https://www.tabbgroup.com/Login.aspx. To purchase the ASEAN Equity Markets report, go to http://www.tabbgroup.com or write to info@tabbgroup.com.
Other recent Asian market research from TABB Group includes “Asian Equity Trading 2009,” an industry update on institutional equity trading across 6 Asian major markets – Australia, Hong Kong, Japan, Singapore, South Korea and Taiwan.
