Electronic trading: On-line prime-broking platform expands into Asia
EBS's move reflects growing hedge fund activity in the region
Electronic foreign exchange trading platform EBS has extended its FX prime broking service to Asia, following a significant adoption rate in Europe and the US. Hedge funds, CTAs and fund managers across Asia now have access to the interbank market on EBS in Australia, Hong Kong and Japan. Material opportunities in Australasia and Asia have come increasingly onto the radar screens of leading platforms eager to make profits from rising FX trading activity in local currencies across the region. According to the Bank for International Settlements, FX turnover in Asian currencies grew faster than the global total between 2001 and 2004 (see table below). Mounting speculation surrounding the possible revaluation of China's renminbi has been a key driver of interest in the region.
Hedge funds are among the most aggressive investors in Asian currencies, making them attractive customers for banks. PricewaterhouseCoopers estimates that there is more than $16 billion invested in hedge funds in Sydney alone, highlighting the importance for FX providers of extending their reach to these territories.
"This is a major step forward for our business in the Asia Pacific region," says Mark Monahan, head of global sales and service at EBS.