Dear Waters News Subscriber,

Economic conditions on both side of the Atlantic may have picked up somewhat in recent months, but progress is sluggish and securities markets remain crowded and competitive. As a result, some institutional clients and financial firms are turning the never-ending search for fresh moneymaking opportunities and better returns to less well-developed markets in regions experiencing higher levels of growth.

It is no secret that Asian markets are on the up—most firms have been looking eastward for over a decade, says Philippe Carré, global head of connectivity for SunGard Global Trading. Carré has observed strong demand among clients for electronic trading in Asia over the past five years, in conjunction with a willingness from local exchanges and brokers to improve market access conditions. However, there is now an increasing appetite to connect with untapped markets in the region, particularly in the South East and North East, he adds.

Similarly, ever since Brazil appeared on the international scene it has been looking strong, but there is now growing interest in Latin America in general, particularly Mexico, Argentina and Chile, Carré says. Likewise, the Middle East, including Saudi Arabia and Kuwait, is likely to remain on priority lists along with slightly tarnished Dubai, he notes.

A broker I spoke with recently shared a mini honor roll of emerging markets that the firm hopes to expand into, which includes Mauritius, Ukraine, Mexico and Kenya. So far, however, Carré has seen little client demand to do business in Africa. This is partly due to a lack of exchange infrastructure—while electronic trading is pretty much the norm across the developing world, a number of exchanges in the region have been slow to catch up and still have traditional trading floors or short electronic trading sessions, making it hard for foreign investors to participate.

This may not be the case for much longer, however—increasing numbers of smaller African exchanges are implementing sophisticated trading systems. Since 2008, Zambia, Ghana and Uganda joined countries including Mauritius, Botswana and Namibia in the brave new world of electronic trading.

John Beck
European Reporter
Waters

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