Daiwa global program trading (PT) provides access to over 47 countries globally and 110 destinations. The firm’s Asia business offers access to all 17 of the MSCI developed markets, emerging markets and frontier Asia countries including Vietnam, Sri Lanka, Pakistan and Bangladesh. The firm also provides a full suite of product coverage within equities including single stock trading, electronic trading, ADR market making, ETF creation/redemption and equity finance.
Daiwa lists the liquidity it provides via DRECT in Japan as one of its key competitive advantages, together with providing real-time FIX updates in all developed markets and emerging markets in Asia (including Thailand, Indonesia and Philippines).
Daiwa currently represents approximately 9% of the exchange turnover on the Tokyo Stock Exchange. DRECT, the company’s Japan dark pool, was launched earlier this year. Clients are able to access DRECT Japan via Daiwa’s PT desk. In Asia ex-Japan, Daiwa’s turnover ranges from 1-4% of exchange turnover depending on the country.
Daiwa’s PT desk is used by mutual funds, exchangetraded fund (ETF) managers, hedge funds, sovereign wealth funds, broker-dealers, transition managers and pension plans. The types of trading conducted by these clients includes investing cash/divesting equities, rebalancing portfolios, index rebalance and ETF creations/ redemptions.
Pre- and post-trade analytics
Daiwa offers clients pre-trade analytics to estimate cost and to evaluate the optimal trading strategy prior to execution. Post-trade analytics reports can be provided for custom timeframes to evaluate execution performance against a variety of trading benchmarks and identify the contributors to performance slippage by country, sector, market cap and strategy. Benchmarks used are open, close, participation-weighted price, arrival price and volume-weighted average price.
Daiwa plans to expand its markets coverage and venues and its IT infrastructure, including smart order routing. Ongoing development of the firm’s analytics capabilities including the further integration of quantitative research and enhancements to transaction cost analysis capabilities.