An agreement by Guosen Securities, a leading Chinese securities broker, to use the high-performance kdb+ database reflects growing levels of interest in algorithmic trading in China, according to Chris Burke, Asia Pacific director of database solutions provider Kx Systems.
The Kx Systems database platform will form part of an order matching system developed by Guosen Securities to cater for large institutional clients. Kdb+ allows vast amounts of data to be accessed and processed with minimal latency. With a single format for both real-time and historical data, kdb+ provides performance and flexibility for high-volume, data-intensive analytics and applications. “Execution speed is key and we optimise performance by moving the analytics alongside the data and having a single architecture for all data,” said Burke, who added that the growth in demand for algorithmic trading solutions in China has also boosted demand for a reduction of latency at all levels as well as for real-time and historical databases.
Burke said Kx has also fielded enquiries in China about high-frequency trading. “But it is still early days for this market,” he noted.
“Choosing kdb+ was an important strategic decision for us,” said Hanxi Liu, general manager of Guosen Securities’ IT department. “The sophistication of Kx’s programming language and the addition of its calculation engine to our new algorithmic trading system provide us with a great competitive advantage and the optimal balance of speed and simplicity. Kx has made a serious commitment to the Asian market, and its industry knowledge and superior solutions have made the company a serious contender in the local arena.”
Founded in 1989, Shenzhen-headquartered Guosen Securities offers brokerage, investment banking, asset management and research services via 40 branches across China and employs 1,300 staff.
Kx Systems set up its Asia Pacific office in Hong Kong two years ago to cater for Asia-based international clients as well as the domestic financial community. “We are seeing rising data volumes across Asia, growth in algorithmic trading and increasingly stringent, data-intensive risk management processes. At the same time, companies are looking to drive down latency at all levels,” said Burke.
Kx’s ‘Growth via Partnership’ strategy with First Derivatives and Symagon has resulted in several new relationships and the expansion of global clients into the Asian market. In October 2009, capital markets tech house First Derivatives, the exclusive sales partner for Kx in the US, UK and Ireland, purchased 215,115 shares from Janet Lustgarten, the co-founder and current CEO of Kx, and from Zurich International. Upon completion, First Derivatives will own 20% of the share capital of Kx. First Derivatives also has an OEM agreement with Kx Systems to use the kdb+ product set for development of its own Delta suite of algorithmic trading software.
Symagon is a wholly owned, Germany-based subsidiary of Nagler and Company that was set up specifically to work with Kx and to provide market data solutions to European financial institutions. Kx Systems and Nagler and Company have a strategic partnership agreement covering the German-speaking areas of Europe, primarily Germany, Austria, Switzerland, Benelux and Poland. Nagler and Company is a medium-sized consultancy focusing on the financial sector.