Hong Kong forum looks at Asian role in securities finance
18 November 2011 Hong Kong
Image: Shutterstock
Delegates at Data Explorers second Hong Kong forum debated Asia's role in securities finance as investment continues to move to regions where growth is anticipated.
The forum, which ran 16 to 17 November, covered topics such as ETFs, hedge funds and posed some questions about Asia's incubation period as it opens up to short selling.
On a positive note, Asia is "the least worst place to be" noted David O'Rear, chief economist of the Hong Kong General Chamber of Commerce. The island is like a broker, taking commission on trade regardless of the global economy and thus is set to weather economic storms while mainland China is still reliant on European and US growth.
On a more cautionary note, a participant in a panel debate noted that it takes time for new markets, such as China, to fully open up to short selling. He said that bankers coming to Asia from the West looking for easy pickings would be heading for a fall because markets are more complex to trade in, people work harder and get paid less.
On the subject of ETFs, Data Explorers said that if there were leveraged products, retail take up would be greater in Asia. "While this is NOT exactly what the panelists said, it is an extension of their view that Asian investors like to take risk and like volatility," Data Explorers commented.
"Asian Hedge Funds are not as hungry to borrow and short ETFs as their American peers due to the bespoke service they get from their prime brokers who create tailored swaps products in lieu. This product is in its infancy but SSGA, iShares, HSBC and others are off and running to build it up...Given their experience of how well it works in the US and the challenges being thrown at ETFs in Europe, they have the experience and skill to get it on its feet 'within 2 years'," the analytics firm wrote.
The forum, which ran 16 to 17 November, covered topics such as ETFs, hedge funds and posed some questions about Asia's incubation period as it opens up to short selling.
On a positive note, Asia is "the least worst place to be" noted David O'Rear, chief economist of the Hong Kong General Chamber of Commerce. The island is like a broker, taking commission on trade regardless of the global economy and thus is set to weather economic storms while mainland China is still reliant on European and US growth.
On a more cautionary note, a participant in a panel debate noted that it takes time for new markets, such as China, to fully open up to short selling. He said that bankers coming to Asia from the West looking for easy pickings would be heading for a fall because markets are more complex to trade in, people work harder and get paid less.
On the subject of ETFs, Data Explorers said that if there were leveraged products, retail take up would be greater in Asia. "While this is NOT exactly what the panelists said, it is an extension of their view that Asian investors like to take risk and like volatility," Data Explorers commented.
"Asian Hedge Funds are not as hungry to borrow and short ETFs as their American peers due to the bespoke service they get from their prime brokers who create tailored swaps products in lieu. This product is in its infancy but SSGA, iShares, HSBC and others are off and running to build it up...Given their experience of how well it works in the US and the challenges being thrown at ETFs in Europe, they have the experience and skill to get it on its feet 'within 2 years'," the analytics firm wrote.
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