Thoughts from Trade Tech China 2011

Written by Zennon Kapron || 03 Mar 2011

Trade Tech came through Shanghai this week. It's only in the third year that Trade Tech has come to China, but it's clear that interest is growing as evidenced by an increasing number of attendees and exhibitors. Although there are few conferences in China concerning electronic trading, Trade Tech has managed to become one of the top events for sell sides and financial technology providers in China largely based on the claim from the event organizers that it represents one of the largest gatherings of buy-sides in China.

 

Hosting an electronic trading event in China can be a difficult proposition. The challenge is that on one hand, capital markets are largely hamstrung by regulations and capital controls that limit both the types of investors and the portfolio of products. On the other hand, technology providers and foreign brokerages/institutions have a very advanced view based on their experience with other more open capital markets around the world that they are keen to showcase. These two conflicts ‘poles’ can make topic selection very difficult as at any point you have a chance of alienating half of the audience.

Although the event did a fairly good job balancing the two, I sat in on the trading technology track and was left a bit disappointed as it seems like we’re still talking about the issues we were talking about last year. Now, again, this isn’t necessarily the fault of the event itself, it’s just the fact talking about how to implement advanced algo engines in china, or complex risk management systems, isn’t very relevant as neither is really important for where the markets are today. Most of the discussions surrounded purchasing decision criteria – cost, reliability, support, commitment to market – nothing new here.

Some other interesting points from the conference:

  • At one point a HK sell-side targeting domestic QDIIs made the comment that fundamentally one of the few remaining supports of the Hong Kong Stock Exchange was the fact that the Shanghai markets were still closed. He posited the question that if that block were removed and the Shanghai market was fully open to foreign investors, what would happen? Would the HKSE still exist?
  • The potential of the HKSE taking on RMB listings will be big. This was one of the hot topics as holders of off-shore RMB look for places to put their money.

 

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