Despite connectivity issues, regulatory hurdles and liquidity barriers, traders are eager to try out algorithms. Electronic trading and the use of algorithms in Asian markets continue to grow despite regulatory hurdles and technological bottlenecks. According to Goldman Sachs, the value of client-directed trade orders executed through algorithms during 2007 more than tripled in Japanese equities and increased six times in the rest of Asia. “There has been a significant increase in the adoption of algorithmic trading on the buy side because, when leveraged properly, it can lower the overall cost of trading and reduce information leakage while producing significant productivity gains,” says Todd Lopez, head of Pan-Asia electronic execution sales with Goldman Sachs. Traders in Asia can appreciate the benefits … Read full article at Waters … Read more »

Emerging markets pose regulatory obstacles and provide fewer trading options but offer the biggest opportunities. When Lou Gerken first started investing in Asia in the mid-70s as an investment professional at London’s GT Capital, Sony was a small-cap stock and Japan was considered a risky, emerging market. Today, Gerken is chairman of San Francisco-based hedge fund Gerken Capital, a registered investment adviser with $1.4 billion under management in alternative assets, and Japan is now considered one of Asia’s mature markets, along with Australia, Singapore and Hong Kong, on par with the US and Europe, “Hong Kong and Taiwan are completely G7-compatible,” says Gerken. “Administrative and operational infrastructure is in place and being rapidly developed.” The pace is even faster than … Read full article at Waters … Read more »

The Chinese government takes steps to put a lid on an overheated stock market. New Chinese investors are rushing into the stock market like buyers trying to get their hands on an Apple iPhone or Nintendo Wii. An average of 300,000 new brokerage accounts for investing in mainland equities and mutual funds were opened daily in the second quarter of this year, according to official statistics. By the end of June, retail brokerage accounts totaled more than 105 million. On some days, investors opened as many as half a million new accounts. The Chinese stock markets have been on a tear. The benchmark Shanghai Composite Index rose from just 1,400 points in May of 2006 to over 4,300 points by … Read full article at Waters … Read more »