Asset managers across Europe increasingly seek opportunities in Eastern Europe, which has spurred one regional broker to join a global buy-side connectivity network.
Prague-based investment bank WOOD & Company Financial Services has today joined trading technology provider SunGard’s Global Network (SGN), a decision the bank said was driven by client demand. Joining the network will give WOOD direct connectivity to more than 2,000 buy-side clients globally.
WOOD will offer SGN members connectivity to the Central and Eastern European stock exchanges of Budapest, Bucharest, Istanbul, Ljubljana, Prague, Vienna, Warsaw and Zabreb.
Vaclav Karpisek, COO for WOOD & Company, told theTRADEnews.com that technology upgrades for emerging market exchanges including Prague and Warsaw at a time of depressed equity volumes in Western Europe, made the Eastern European exchanges more attractive to foreign investors.
In April, for instance, Warsaw Stock Exchange overhauled its trading infrastructure by migrating to NYSE Technologies’ Universal Trading Platform, which it hopes will facilitate an increase in trading via faster connectivity and a higher volume of messages. Similarly, in November, the Prague Stock Exchange went live on the Xetra trading platform, which is also used by the Budapest exchange. Karpisek believes these technology upgrades will spur greater uptake of automated trading.
“Strong performance on the Warsaw exchange has driven regional growth, while technological advances for Prague and Budapest will also attract a wider member base and a subsequent increase in liquidity,” Karpisek said.
“We anticipate significant growth in our algorithmic trading in particular, as buy-side firms look to leverage local knowledge to execute,” he said.
SunGard’s SGN was sought by WOOD clients specifically, due largely to stability in connectivity to Central and Eastern European trading venues.
Philippe Carré, global head of connectivity for SunGard’s capital markets business, said more asset managers were seeking exposure to Eastern European markets for a variety of macro reasons. In particular, the dearth of initial public offerings (IPOs) across Europe had signified a need for investors to search further afield for growth opportunities.
“There is a feeling we will see growth in IPOs in Eastern Europe as Governments look to privatise state-owned industries, which is appealing to European investors at a time of fewer western European offerings; we believe this will be key to regional growth,” Carré said.