Technology is emerging as a key differentiator for brokerages competing for business from institutional investors in the Asian region, according to a new report from analyst Celent. Neil Katkov, managing director of Celent’s Asia Research group and co-author of the report, says whereas five years ago, electronic trading had just started in Asia, brokerages and buy side firms are now using sophisticated proprietary systems and vendor systems. “Brokerages are poised to introduce sophisticated e-trading capabilities even in emerging markets such as China and India,” he reckons.

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IT investment by the Japanese securities industry will continue to grow, according to a new report - IT Investment Trends in the Japanese Securities Industry – from analyst Celent.

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Basel II deadlines and the continued focus on managing operational risk are among the main strategic risk management issues facing IT departments in Asia-Pac banks, suggests Financial Insights’ annual report Asia/Pacific Risk 2008 Top 10 Strategic Initiatives: Striking an Optimal Balance between Risk and Reward.

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Financial institutions across Asia should batten down the hatches and prepare for economic difficulties ahead, giving more thought to how they operate in a difficult environment and focusing on risk, operational excellence and human capital.

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Mainland China’s equity market will continue to grow and become more open to global investors, although the Chinese Government’s monetary policy shift may slow down growth in 2008. In contrast, Hong Kong’s equity market is already quite mature and open, finds Celent’s latest report, Equity Market Trends in Mainland China and Hong Kong.

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Global information technology spending by financial services institutions is slowing as economic conditions worldwide worsen, with the latest Celent report, IT Spending in Financial Services: A Global Perspective, suggesting that, while spending will reach US$342.1 billion in 2007, this 5.9 per cent increase over 2006’s level is substantially lower than the 8.7 per cent growth achieved in 2006.

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“Technology’s power to transform an industry has been emphatically demonstrated in the Indian capital markets,” finds a new report from analyst Celent (entitled The Indian Exchange-Traded Securities Market). Five years ago India’s trading infrastructure was “primitive”, the analyst says – but today it is “one of the most modern exchange-traded securities markets, comparable to the best in the world”. According to Celent, during the past four years the Indian market has outperformed most global markets, with an annual return in excess of 30 per cent each year. The market capitalisation has reached US$1 trillion, and Celent expects it to reach US$1.4 trillion by the end of 2008.

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A series of informal audience polls during the FIX Protocol Limited Trading Summit in Singapore in May yielded some interesting observations on the state of play with electronic trading in the Asian region, as well as some valuable insights into how Asia e-trading will develop in the coming years.

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